Financial information is presented below: $\begin{array}{lr}
\text { Operating Expenses } & \$ 92,800 \
\text { Sales Returns and Allowances } & 18,000 \
\text { Sales Discounts } & 12,000 \
\text { Sales Revenue } & 350,000 \
\text { Cost of Goods Sold } & 176,000
\end{array}$ The gross profit rate would be
A) .356.
B) .450.
C) .146.
D) .497.

Question

Quizplus · Accepted Answer

The gross profit is calculated as Sales Revenue - Sales Returns and Allowances - Sales Discounts - Cost of Goods Sold = $350,000 - $18,000 - $12,000 - $176,000 = $144,000. The gross profit rate is then Gross Profit / (Sales Revenue - Sales Returns and Allowances - Sales Discounts) = $144,000 / ($350,000 - $18,000 - $12,000) = $144,000 / $320,000 = .45 or 45%.

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

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