When you minus direct production costs from selling price, you get your profit margin. Group of answer choicesTrueFalse

Assessing the Statement

1. Understanding Profit Margin
   Profit margin is defined as the difference between the selling price and the cost of goods sold (COGS), which includes direct production costs.

2. Breaking Down the Components

   • Selling Price: The amount for which a product is sold.
   • Direct Production Costs: These are the costs that can be directly attributed to the production of goods, such as raw materials and labor.

3. Profit Margin Calculation
   The profit margin is calculated using the formula: $\text{Profit Margin} = \text{Selling Price} - \text{Direct Production Costs}$

4. Verification of the Statement
   Given the understanding that profit margin is indeed obtained by subtracting direct production costs from the selling price, the statement provided is aligned with this definition.

Final Conclusion

Thus, the correct response to the statement is True.