A Merchandiser Will Earn an Operating Income of Exactly $0

question 131

Multiple Choice

A merchandiser will earn an operating income of exactly $0 when

• A)gross margin equals operating expenses.
• B)net sales equals cost of goods sold.
• C)cost of goods sold equals gross margin.
• D)operating expenses equal net sales

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Definitions:

Competitive Forces Model

A business framework devised by Michael Porter that analyzes competitiveness by recognizing five major forces that could endanger a company’s position.

Value Chain Model

Model that shows the primary activities that sequentially add value to the profit margin; also shows the support activities.

General Strategies

Refers to the broad methods or plans formulated by organizations or individuals to achieve major goals or objectives.

Differentiation

The act of making a product, service, or business stand out from its competitors by highlighting unique features or qualities.