How Is Total Revenue Calculated

question 111

Multiple Choice

How is total revenue calculated?

• A)Cost multiplied by the quantity of each item produced
• B)Price multiplied by the quantity of each item sold, subtracted from total cost
• C)Price multiplied by the quantity of each item sold
• D)None of these calculations are correct.

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Definitions:

Ending Inventory

The cumulative worth of merchandise ready for sale when an accounting period concludes.

Direct Materials

Raw materials that can be directly attributed to the production of goods, forming an essential component of finished products.

Budgeted Sales

An estimate of the sales revenue a company expects to achieve for a certain period, often used for planning and control purposes.

Beginning Inventory

The value of all the inventory that a company has at the start of an accounting period, before any purchases or sales have been made.