# Financial information is presented below: Operating expenses $21000 Sales returns and...

## Question:

Financial information is presented below:

Operating expenses | $21000 |

Sales returns and allowances | 7000 |

Sales discounts | 3000 |

Sales revenue | 168000 |

Cost of goods sold | 99000 |

The gross profit rate would be

A. 0.42.

B. 0.63.

C. 0.37.

D. 0.35.

## Gross profit

Gross profit is the excess of net sales over necessary costs in producing the product, either direct or indirect. Such costs include fixed costs and variable costs.

## Answer and Explanation: 1

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View this answerAnswer : C. 0.37

The gross profit rate is the ratio of gross profit over the net sales and would be computed as follows:

Sales revenue | $168,000 |

Le... |

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Chapter 5 / Lesson 17Learn how gross profit is calculated. Explore how to calculate gross profit margin, the definition of revenue, and the difference between gross and net profit.

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