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31 August, 06:42

Net sales for the year were $325,000 and cost of goods sold was $240,500 for the company's existing products. A new product is presently under development and has an expected selling price of $40 per unit in order to remain competitive with similar products in the marketplace. The dollar amount of gross profit and the gross profit ratio for the year were:

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  1. 31 August, 06:56
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    Gross profit = 84,500.00

    Gross profit ratio = = 26%

    Explanation:

    Gross profit is sales less cost of goods sold. And the gross profit margin the percentage of sales made as gross profit.

    Gross profit = sales - cost of goods sold

    = 325,000 - 240,500

    = 84,500.00

    Gross profit ratio = Gross profit/sales * 100

    = 84,500/325,000 * 100

    = 26%

    Gross profit = 84,500.00

    Gross profit ratio = = 26%
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