Jared Analyzed the Income Statement for His Independent Label and Found

question 36

Multiple Choice

Jared analyzed the income statement for his independent label and found that for every dollar of sales, 30 cents was spent on cost of goods sold. The gross profit per dollar was 70 cents. If 20 cents was spent on operating costs and 10 cents on taxes, what is the net profit per dollar?

• A) 40 cents
• B) 60 cents
• C) 30 cents
• D) 70 cents
• E) 50 cents

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Definitions:

Purchase Discount

A reduction in the price of goods or services, offered by the seller to the buyer, typically for early payment or bulk buying.

Inventory Stock Status

A report or record showing the quantities, status, and conditions of items a company has in stock.

Non-inventory Item

A non-inventory item is a type of product or service that a business sells or buys but does not track as part of its inventory.

Specific Customer Job

A particular project or task undertaken for a specific client, often used in the context of billing or project management.