How do gross profits, operating income, and net income relate to the areas of business activity reported in the

income statement?

What will be an ideal response?


The income statement begins with sales or revenue, from which we subtract the cost of goods sold (the cost of
producing or acquiring the product or service to be sold) to yield gross profits. 1. Sales (revenues), which is equal to the
selling price of the products or services to be sold times the number of units sold (selling price * units sold = total sales)
2. Cost of goods sold, which is the cost of producing or acquiring the goods or services that were sold 3. Operating
expenses, which include: a. Marketing and selling expenses (the expenses related to marketing, selling, and
distributing the products or services) b. The firm's overhead expenses (general and administrative expenses, and
depreciation expense).

Business

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A party with whom you have a contract relationship has sued you. The contract between the two of you includes an arbitration clause. Which of the following statements is true?

a. If the party sues on a contract with an arbitration clause they are deemed to forfeit the dispute. b. Because one of the parties began the judicial process the judicial process must be completed before any arbitration can proceed. c. If the party sued rather than began the arbitration, the case can no longer be arbitrated. d. You have options. You could either answer the lawsuit and continue in litigation or make a motion to the court to compel arbitration.

Business

Northwest Outdoor Store will have cash receipts of $83,000 in December and cash disbursements of $78,000 for this month. If its beginning cash is $5,000 and its desired reserve is $4,000, what will its excess be for December?

A) There is no excess but a shortfall. B) $6,000 C) $9,000 D) $13,000

Business

According to the Pendulum view on globalization, globalization is very recent and one-directional.

Answer the following statement true (T) or false (F)

Business

The LRAC is most closely related to which of the following?

A) long-term marketing plans B) long-term business plans C) the cost of producing a greater quantity of units D) the cost of promoting a greater quantity of units E) the legal responsibility of a company

Business