Question

Management is concerned about the lower level of profitability in the Mid-Central Region. Which of the following would be a reasonable possible explanation(s) of the lower profitability for the Mid-Central Region?

I. The lower number of stores in the Mid-Central Region.
II. Sales employees are not as productive in generating sales as those in other regions.
III. The Mid-Central Region has a lower gross margin.
A. I only.
B. II only.
C. II and III only.
D. I, II and III

Answer 1

The lower profitability in the Mid-Central Region could be due to fewer stores, less productive sales employees, and a lower gross margin, impacting the overall profitability in various ways. The correct answer is D. I, II and III.

Step-by-step explanation:

A reasonable possible explanation(s) of the lower profitability for the Mid-Central Region could include: the lower number of stores in the region, which could impact overall sales volume;

less productive sales employees, affecting the ability to generate sales as compared to other regions; and a lower gross margin, meaning the difference between sales and cost of goods sold is smaller, possibly due to higher costs or lower sales prices. Therefore, the correct answer is D. I, II and III.