Financial information is presented below: $$\begin{array} { l r }
\text { Operating Expenses } & \$ 90,000 \
\text { Sales Returns and Allowances } & 18,000 \
\text { Sales Discounts } & 12,000 \
\text { Sales Revenue } & 320,000 \
\text { Cost of Goods Sold } & 174,000
\end{array}$$ The gross profit rate would be
A) .363.
B) .400.
C) .456.
D) .503.

Question

Financial information is presented below: $$\begin{array} { l r } 
\text { Operating Expenses } & \$ 90,000 \
\text { Sales Returns and Allowances } & 18,000 \
\text { Sales Discounts } & 12,000 \
\text { Sales Revenue } & 320,000 \
\text { Cost of Goods Sold } & 174,000
\end{array}$$ The gross profit rate would be
A) .363.
B) .400.
C) .456.
D) .503.

Quizplus · Accepted Answer

Gross profit is calculated as Sales Revenue minus Cost of Goods Sold. Gross profit rate is Gross Profit divided by Sales Revenue. Here, Gross Profit = $320,000 - $174,000 = $146,000. Gross Profit Rate = $146,000 / $320,000 = 0.456.

Financial Information Is Presented Below The Gross Profit Rate Would Be A)

Financial Information Is Presented Below The Gross Profit Rate Would Be
A)