AB Distributors Is a Company That Serves as a Shipping

question 51

Short Answer

AB Distributors is a company that serves as a shipping intermediary for other companies. Its sales revenue has increased from the previous year. Jonathan, a sales manager at AB, says, "Since the company has increased its revenue, it is now more profitable."
Another manager at AB Distributor, Shawna, suggests that if the company's revenue had not increased, it would not have been able to increase its profits. Which of the following points out a flaw in Shawna's reasoning?
Other similar companies have increased their profits too.
Revenue is not always relevant to figuring profitability.
Profitability is not the only objective of the company.
The company can increase revenue only by cutting costs.
It is possible to increase profits by lowering costs.

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Definitions:

Income Tax

Taxes that are based on the amount of taxable income that you earn.

Earned Income

Income derived from active participation in a business or trade, typically including wages, salaries, commissions, and tips.

Unearned Income

Refers to money received that does not come from employment, work, or business activities, such as dividends, interest, or government benefits.

Medical Deduction

An itemized deduction on personal income taxes for expenses related to healthcare beyond a certain percentage of adjusted gross income.