A merchandising business will earn a net income of exactly $0 when
A) net sales equals cost of goods sold.
B) operating expenses equal net sales.
C) gross margin equals operating expenses.
D) cost of goods sold equals gross margin.

Question

Quizplus · Accepted Answer

A merchandising business will earn a net income of exactly $0 when gross margin equals operating expenses, as this means all the profit from sales has been used to cover the operating expenses, leaving no net income.

A Merchandising Business Will Earn a Net Income of Exactly