In many cases, the Gross Profit Ratio or Gross Profit Margin is used to evaluate the efficiency of the manufacturing process for a single product sold by a firm or for several products sold by the firm. One product may be more efficient to produce and sell than another. It is possible to calculate the gross profit margin for each product as long as the company can distinguish between the direct expenses of making each one. Direct expenses are reported on the income statement as cost of goods sold, which is a subset of cost of sales. Cost objects can be products, departments, or projects. Direct costs are expenses directly associated with a cost object.