gross profitForums › ACCA Forums › ACCA FA Financial Accounting Forums › gross profitThis topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.Viewing 4 posts - 1 through 4 (of 4 total)AuthorPosts August 23, 2014 at 7:51 pm #192076 mansoorParticipantTopics: 424Replies: 542☆☆☆☆which of the following wd cause the gp margin to fall1. closing inventory is lower than opening inventory 2. some items in the inventory were valued at less than cost.the text says that 2 is the correct answer.i chose 1 because:random numbers:cogs=50 +100 – 60 = 90 cogs=60 + 100 – 50 = 110thus when closing inv<opening inv gives a higher cost thus a lower gp.so where am i wrong? August 24, 2014 at 6:57 am #192098 John MoffatKeymasterTopics: 57Replies: 54704☆☆☆☆☆But it does not affect the margin (profit as % of sales).If GP margin is (say) 20%, then if sales are 100, cost of goods sold will be 80. If sales are 200, then cost of goods sold will be 160.The margin does not change just because sales and cost of goods sold increase or decrease. August 24, 2014 at 11:47 am #192147 mansoorParticipantTopics: 424Replies: 542☆☆☆☆aha! … 🙂 August 24, 2014 at 2:09 pm #192160 John MoffatKeymasterTopics: 57Replies: 54704☆☆☆☆☆🙂AuthorPostsViewing 4 posts - 1 through 4 (of 4 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In