There are some important uses of Gross Profit Analysis, which are given below:
- Management happens to capable to outline the problems that should correct the circumstances and situation.
- It describes the feeble and weak spots in the annual's performance.
- The calculated and proper planned gross profit is the duty of the manufacturing as well as the marketing branch.
- Production unit must explain for the raise in cost. While the marketing department must explain the changes in the sales prices, the shift in the sales mix, and the decrease in units sold.
- The cost price variance should be more analyzed to find out the variances for factory overhead, labor and materials. Also See important reasons for change in Gross profit