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Ending Inventory Equals the Cost of Goods Available for Sale

question 61

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Ending inventory equals the cost of goods available for sale less beginning inventory.


Definitions:

Contribution Margin Ratio

The portion of sales revenue left over after variable expenses have been deducted, expressed as a percentage of sales revenue.

Variable Expenses

Costs that vary in direct proportion to changes in an activity level or volume, such as raw materials and direct labor.

Sales

Sales refer to the revenue generated from the exchange of goods or services for money or other assets between a seller and a buyer.

Net Operating Income

The profit generated from a company's regular business operations, excluding expenses like taxes and interest.

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