What would be the best strategy for a business to increase its gross profit? (A) Use cost centres (B) Reduce fixed costs (C) Minimise expenses (D) Use sale and leaseback - HSC - SSCE Business Studies - Question 8 - 2012 - Paper 1

To determine the best strategy for boosting gross profit, we need to understand what gross profit entails. Gross profit is calculated by deducting the cost of goods sold (COGS) from total revenue. An effective strategy would involve enhancing revenue or minimizing variable costs associated with production.

Among the options given:

• (A) Use cost centres: This approach could help in monitoring costs but does not directly increase gross profit.
• (B) Reduce fixed costs: While this can improve net profit, it has less impact on gross profit.
• (C) Minimise expenses: This is a broad term and needs clarification, specifically regarding variable costs related to production.
• (D) Use sale and leaseback: This could free up cash but does not directly impact gross profit.

Considering these analyses, the most effective strategy would be to focus on minimizing variable costs associated with production, which aligns with option (C). Therefore, while all options have some merits, option (C) is the strategy closest to increasing gross profit directly based on the information evaluated.