CIMA F2 Advanced Financial Reporting F2 Question # 44 Topic 5 Discussion

CIMA F2 Advanced Financial Reporting F2 Question # 44 Topic 5 Discussion

F2 Exam Topic 5 Question 44 Discussion:
Question #: 44
Topic #: 5

KL sells luxury leather handbags and has 3 stores in exclusive shopping areas. Following years of static revenues and margins, in August 20X6 KL opened a fourth store at a busy airport terminal which is proving to be successful.

The revenue and gross profit of KL for the years ended 31 March 20X7 and 20X6 are as follows:

  F2 Question 44

Which of the following would be a contributing factor to the movement in the gross profit margin of KL?


A.

A worldwide shortage of leather resulting in increased prices from suppliers.


B.

The opportunity to sell handbags in the airport store at a premium price.


C.

KL locating a new supplier prepared to supply handbags at a cheaper price.


D.

KL locating a new supplier closer to the warehouse, reducing distribution costs.


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