Multiple Choice
Customer research helps improve company profits by increasing which of the following components related to net sales?
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4. Merchandising Operations
Net Sales
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In the profit equation, what is multiplied by the quantity sold to determine total revenue before deducting costs?
A
Net sales price per unit
B
Gross profit per unit
C
Total expenses per unit
D
Net income per unit
Verified step by step guidance1
Understand the profit equation: Profit is calculated as Total Revenue minus Total Costs. Total Revenue is determined by multiplying the sales price per unit by the quantity sold.
Identify the key term 'total revenue': Total revenue represents the total income generated from selling goods or services before deducting any costs.
Recognize the role of 'quantity sold': Quantity sold refers to the number of units sold during a specific period.
Determine what is multiplied by the quantity sold: To calculate total revenue, the net sales price per unit is multiplied by the quantity sold. This represents the income generated per unit sold.
Clarify why other options are incorrect: Gross profit per unit, total expenses per unit, and net income per unit are not directly multiplied by quantity sold to determine total revenue. These terms relate to profit calculations after costs are considered.
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