Cost of Goods Sold Is Equal to

question 68

Multiple Choice

Cost of goods sold is equal to

• A)the total amount of merchandise purchased during the year.
• B)the cost of merchandise purchased plus transportation-in costs less ending inventory.
• C)the cost of merchandise purchased plus transportation-in costs plus beginning inventory minus purchase returns and allowances and purchase discounts minus ending inventory.
• D)the cost of merchandise purchased plus transportation-in costs plus beginning inventory minus purchase returns and allowances and purchase discounts.

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Definitions:

Gross Margin Percentage

The portion of sales revenue that exceeds the cost of goods sold, expressed as a percentage, indicating the financial health of product sales.

Net Profit Margin Percentage

A financial metric that shows the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total sales.

Contribution Margin

The amount remaining from sales revenues after all variable expenses have been deducted.

Gross Margin Percentage

The portion of each dollar of revenue that a company retains as gross profit, calculated as gross profit divided by total revenue.