The gross margin is added into cost of sold goods to calculate the __________?
Correct answer: A. revenues
- A. revenues
- B. operating leverage
- C. contribution margin
- D. operating marginCompany Earnings
Explanation
Revenue is derived by adding gross margin to cost of goods sold: Revenue = Cost of goods sold + Gross margin. Operating leverage and operating margin are different measures.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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