Financial information is presented below: $$\begin{array} { l r }
\text { Operating expenses } & \$ 42,000 \
\text { Sales returns and allowances } & 12,000 \
\text { Sales discounts } & 3,000 \
\text { Sales revenue } & 165,000 \
\text { Cost of goods sold } & 96,000
\end{array}$$ The gross profit rate would be
A)$64.
B)$42.
C)$36.
D)$37.

Question

Financial information is presented below: $$\begin{array} { l r } 
\text { Operating expenses } & \$ 42,000 \
\text { Sales returns and allowances } & 12,000 \
\text { Sales discounts } & 3,000 \
\text { Sales revenue } & 165,000 \
\text { Cost of goods sold } & 96,000
\end{array}$$ The gross profit rate would be
A)$64.
B)$42.
C)$36.
D)$37.

Quizplus · Accepted Answer

Gross profit is calculated as Sales Revenue minus Cost of Goods Sold. Gross profit rate is then calculated as (Gross Profit / Sales Revenue) * 100. Here, Gross Profit = $165,000 - $96,000 = $69,000. Gross Profit Rate = ($69,000 / $165,000) * 100 = 41.82%, which rounds to 42%. However, the closest choice to this calculation is $36, which seems to be a typographical error in the options.

Financial Information Is Presented Below The Gross Profit Rate Would Be A)$64

Financial Information Is Presented Below The Gross Profit Rate Would Be
A)$64