In supplying private-label footwear to chain retailers, the sizes of a company\'

Question

In supplying private-label footwear to chain retailers, the sizes of a company's margins over direct costs (as reported on p. 6 of each issue of the FIR) should be viewed as
cash that can be used to pay down long-term debt or increase dividend payments or be deposited in the company's retained earnings (to strengthen the company's balance sheet).
how much the company received from each pair of private-label footwear sold over and above materials costs and direct labor costs-- these dollars are automatically deposited in the company's retained earnings account and help boost the company's credit rating.
the net profit a company earns on each pair of private-label footwear sold.
the gross profit a company earns on each pair of private-label footwear sold.
how much each pair of private-label footwear sold adds to the company's pretax profits, assuming that the company's margins on branded footwear were sufficient to cover all administrative expenses and all interest costs.

Explanation / Answer

Answer:

Margin over direct costs means sales - Direct cost that result in Gross profits

Hence the answer is :

the gross profit a company earns on each pair of private-label footwear sold.

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