AB Limited Reports Revenue of £752 200 in Its 20X4

Multiple Choice

AB Limited reports revenue of £752 200 in its 20X4 financial year, and its gross profit margin in the period is 27.3%.The gross margin of its rival CD Limited is higher at 28.2%.The directors of AB think that it will be possible to increase revenue by 1.7% in the 20X5 financial year.What is the maximum increase permissible to cost of sales if the directors wish to achieve the same gross profit margin as that of CD Limited?

A) Insufficient information given
B) £9296
C) £2412
D) £12 787