If a firm can reduce its cost of goods sold and continue to sell its product for the same price,we would expect the firm to enjoy an increase in its _______.
A)revenue
B)liabilities
C)gross margin
D)employee turnover

Question

Quizplus · Accepted Answer

A decrease in cost of goods sold would increase the gross margin, which is the difference between revenue and cost of goods sold. This increase in gross margin would result in greater profitability for the firm. Revenue may or may not increase depending on the elasticity of demand for the product. Liabilities and employee turnover are not directly affected by a decrease in cost of goods sold.

If a Firm Can Reduce Its Cost of Goods Sold