When considering budgeting, comparing which two items can provide insights into performance?

Comparing the cost of goods sold (COGS) with total revenue provides valuable insights into a company's performance through the assessment of its gross profit margin. This metric indicates how efficiently a company is producing and selling its products. When COGS is low relative to total revenue, it implies that the company is managing its production costs effectively, leading to higher profitability. Conversely, if COGS is close to total revenue, it suggests that the company may be facing challenges in controlling costs or pricing products effectively, which can impact overall profitability. This comparative analysis allows businesses to make informed decisions regarding pricing strategies, cost control measures, and overall business performance.