What are the components of merchandising income?

Merchandising income primarily consists of three components: revenue from sales of goods, cost of goods sold (COGS), and gross profit. Revenue is generated from selling merchandise, while COGS includes all direct costs associated with producing or purchasing the goods sold. Gross profit is calculated by subtracting COGS from total revenue, representing the income available to cover operating expenses and generate profit. Additionally, other factors like markdowns, discounts, and returns can also influence merchandising income.