BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Option c: Cost of goods sold is not included while computing net sales as it is taken into consideration while computing gross profit or gross loss. Thus, this option is correct.

Detailed explanation-2: -The main components of COGS are the direct expenses incurred such as production costs, inventory acquisition expense, labor, and raw materials. Indirect costs such as marketing and distribution are not included in COGS.

Detailed explanation-3: -Net sales is the result of gross revenue minus applicable sales returns, allowances, and discounts. Costs associated with net sales will affect a company’s gross profit and gross profit margin but net sales does not include cost of goods sold which is usually a primary driver of gross profit margins.

Detailed explanation-4: -Cost of Goods Sold (COGS) measures the “direct cost” incurred in the production of any goods or services. It includes material cost, direct labor cost, and direct factory overheads, and is directly proportional to revenue.

Detailed explanation-5: -Net sales refer to the total revenue generated by a business after deducting the cost of goods sold, taxes, and other expenses. Gross sales refer to the total revenue generated by a business before any deductions are made.