Below is a major portion of the income statements ofKTA Inc. for 2020 and 2021:SalesCost of SalesGross Margin2020P80,00050,000P30,0002021P97,20072,000P25,200The firm sold its sole product for P8/unit during 2020.Even though the sales units increased by 20% during 2021,the gross margin declined. Disappointed with the results,the owner asked for your assistance in analyzing the causeof the gross margin decline.Increase (decrease) in gross margin due to change in units sold.A. (P4,800)D. P16,000B. P6,000D. P26,000

2020 2021 change sales 80000 97200 selling price 8 8 units 10000 12000 2000…

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Increase (decrease) in gross margin due to change in units sold A. (P4,800) B. P6.000 D. P16,000 D. P26.000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Below is a major portion of the income statements of
KTA Inc. for 2020 and 2021:
Sales
Cost of Sales
Gross Margin
2020
P80,000
50,000
P30,000
2021
P97,200
72,000
P25,200
The firm sold its sole product for P8/unit during 2020.
Even though the sales units increased by 20% during 2021,
the gross margin declined. Disappointed with the results,
the owner asked for your assistance in analyzing the cause
of the gross margin decline.
Increase (decrease) in gross margin due to change in units sold.
A. (P4,800)
D. P16,000
B. P6,000
D. P26,000

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