• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

June 2025 ACCA Exam Results

Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>

revenue, COS and GPM

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › revenue, COS and GPM

  • This topic has 3 replies, 2 voices, and was last updated 4 years ago by Kim Smith.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • July 3, 2021 at 2:51 am #626862
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    Revenue has grown by 28% in the year however, cost of sales has only increased by 10%.

    This increase in sales may be due to the bonus scheme and the advertising however, this does not explain the increase in gross margin.

    There is a risk that sales may be overstated.

    P.S.- GPM has increased from 44.4% to 52.2% y-o-y.

    Ma’am i don’t understand in what context are they talking about GPM? what exactly doesn’t explain the increase in GPM?

    July 3, 2021 at 8:56 am #626882
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8312
    • ☆☆☆☆☆

    It’s the same issue I addressed on your previous post https://opentuition.com/topic/gross-profit-margin-4

    If margins are assumed to be constant – increased sales volume does not change GP% because cost of sales should also be increased for that volume. So if GP% increases without a valid explanation (e.g. sales prices were increased during the year but without a corresponding increase in costs of sales) – either revenue is overstated and/or cost of sales is understated (e.g. purchases are understated)

    July 3, 2021 at 12:58 pm #626895
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    ohhh so you are saying that the fact that COS didn’t increase by 28% (i.e. as much as revenue) means that sales volumes have not increased(due to factors such as advertising or bonus), but instead overall revenue has increased due to other manipulative tactics-which further gets corroborated through abnormal rise in GPM.

    am i getting it correctly?

    July 3, 2021 at 1:06 pm #626896
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8312
    • ☆☆☆☆☆

    Yes!

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • omerbasheer on The Statement of Financial Position and Income Statement (part d)
  • Kim Smith on AA Chapter 9 Questions
  • Walkera on Basic Variance Analysis part 1 – ACCA Performance Management (PM)
  • kartierclass on AA Chapter 9 Questions
  • revathik on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in