Rather have higher gross profit $ or margin?
$100 Revenue and $80 Cogs in year 1
Would you rather
Increase Revenue by 10% and keep COGS same or same revenue but decrease COGS 10%
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i. Increase Revenue by 10% = Revenue is now $110 = Gross is $30
ii. Decrease COGS by 10% = COGS is now $72 = Gross is $28
In this case, you would rather increase revenue. Of course, there's a certain number where it makes more sense to increase the margin, but it's higher than 10% for this example.
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