Answer:
Food is more profitable
Explanation:
The formula for calculating the gross margin ratio is as below.
Gross margin ratio= gross profit/ net sales.
Therefore, gross profit= net sales x gross profit ratio
in this case:
The gross profit ratio is 67%
gross profits from food sales
=1200 x (67/100)
=$804
Gross profit from beverages
=$800 x ( 67 /100)
=$536
Gross profit from food sales is higher than that of beverages
Food is more profitable
