Which factors influence the gross profit margin of the e-waste factory?

• A. Advertising spend only.
• B. Processing costs per unit, yields, and gold prices.
• C. Market share of gold.
• D. Number of distribution channels.

Answer: (B)

Gross profit margin measures how much profit you keep from each unit after covering the production costs. For an e-waste factory, the main drivers are processing costs per unit, what you can extract (yields), and the price you can fetch for that extract (gold prices).

Processing costs per unit directly reduce the amount left to cover other costs or contribute to profit. If these costs rise, the margin shrinks; if they fall, the margin widens.

Yields matter because they determine how much valuable material you actually recover from each unit. Higher yields mean more revenue from the same processing effort, improving gross margin, while lower yields reduce revenue for the same costs.

Gold prices set the revenue you get from the recovered gold. When prices rise, revenue per unit increases and so does the gross margin; when prices fall, the margin tightens.

Advertising spend, market share of gold, and the number of distribution channels influence other aspects of profitability or sales volume, but they don’t hit the per-unit production cost and revenue in the direct way that processing costs, yields, and gold prices do.