American Importers Reports Net Income of $60,000 and Cost of Goods

question 13

Multiple Choice

American Importers reports net income of $60,000 and cost of goods sold of $540,000.If the company's gross profit rate was 40%, net sales were

• A)$900,000.
• B)$1,350,000.
• C)$1,410,000.
• D)$990,000.

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Definitions:

Increases

This term refers to a situation where a quantity or quality of something goes up or becomes more.

Constant-Cost Industry

An industry where the costs of production do not change as the overall level of production increases or decreases.

Long-Run Supply

The total amount of a good or service that is available in the market over a long term, taking into account adjustments in production and entry or exit of firms.

Decreasing-Cost Industry

An industry where increased production leads to lower costs per unit, typically due to economies of scale or technological improvements.