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

Question:

Financial information is presented below:

Operating expenses$21000
Sales returns and allowances7000
Sales discounts3000
Sales revenue168000
Cost of goods sold99000

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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Answer : 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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How to Calculate Gross Profit Margin: Definition & Formula

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Chapter 5 / Lesson 17
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Learn 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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