Question

The budgeted multi-step income statements of both manufacturing and merchandising companies include the calculation of gross profit.
a) true
b) false

Answer 1

Answer:

TRUE

Explanation:

The gross profit is the difference betwenethe sales revenue and the cost of good sold/manufactured

for retail companys they determinate the cost using a given inventory method like FIFO LIFO or weighted average.

Manufacturing companies will subtract from the sales revenue the cost of good manufactured which can be determinated in various ways like process, order, absorption or ABC