With a gross margin of $9000 and a cost of goods sold of $8000, the revenue will be _________?
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Answer: C. $17,000
Explanation
Revenue equals cost of goods sold plus gross margin combined together. Adding eight thousand dollars and nine thousand dollars results in seventeen thousand dollars. This standard accounting relationship connects sales revenue, costs, and gross profit. Gross margin represents the profit remaining after subtracting cost of goods sold from revenue. Cost of goods sold measures the direct expenses tied to producing sold items. Income statements report total revenue as the top-line figure for the business.
Retailers and manufacturers track revenue to assess overall business growth and scale. Financial analysts review top-line revenue figures to compare market share across peers. Accurate revenue calculations are essential for corporate tax reporting and compliance. Option A underestimates revenue by suggesting a minor profit figure instead. Option B introduces an impossible negative sign into the revenue calculation. Option D incorrectly applies a negative sign to an inflated revenue total.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
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