A Net Loss Will Occur If Revenues Are

question 80

Multiple Choice

A net loss will occur if revenues are

• A) greater than expenses
• B) less than expenses
• C) equal to expenses
• D) greater than Cost of Goods Sold

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Definitions:

Job-Order Costing

An accounting method that collects and assigns manufacturing costs to individual units or batches of production, suitable for customized products.

Predetermined Overhead Rate

An estimate used to allocate manufacturing overhead to products, calculated before the accounting period begins based on expected costs and activity levels.

Gross Margin

The difference between revenue and cost of goods sold, divided by revenue, expressed as a percentage; it measures how efficiently a company uses its resources to make products.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a selected activity base such as machine hours or labor hours.