If Direct Materials Cost Per Unit Decreases, the Amount of Sales

question 121

True/False

If direct materials cost per unit decreases, the amount of sales necessary to earn a desired amount of profit will decrease.

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Definitions:

Profit

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the operations.

Markdown

A reduction from the original or retail price of goods or services, typically to stimulate sales or clear out inventory.

Invoice

A paper provided by the vendor to the purchaser detailing the goods or services rendered and the total charge.

Discount

A reduction applied to a regular price or rate, often used to encourage purchase or prompt payment.