Solution 17.4

Outline the factors that contribute to a fluctuating gross profit percentage.

A fluctuating gross profit percentage can be caused by;

Reduction	Increase
Reduction in Selling Price	Increase in Selling Price
Increase in the cost price of stock purchases	Reduction in cost Price of stock purchases
Changes in the product sales mix with the business selling a higher proportion of goods with a lower gross profit margin	Changes in the product sales mix with the business selling a higher proportion of goods with a higher gross profit margin
Theft Cash Stock/Waste

An increase in sales volume will lead to an increase in gross profit but NOT to increase in gross profit percentage.