Financial information is presented below: $$\begin{array} { l r }
\text { Operating expenses } & \$ 45,000 \
\text { Sales returns and allowances } & 4,000 \
\text { Sales discounts } & 6,000 \
\text { Sales revenue } & 160,000 \
\text { Cost of goods sold } & 90,000
\end{array}$$ The gross profit rate would be
A) .40.
B) .60.
C) .44.
D) .45.

Question

Financial information is presented below: $$\begin{array} { l r } 
\text { Operating expenses } & \$ 45,000 \
\text { Sales returns and allowances } & 4,000 \
\text { Sales discounts } & 6,000 \
\text { Sales revenue } & 160,000 \
\text { Cost of goods sold } & 90,000
\end{array}$$ The gross profit rate would be
A) .40.
B) .60.
C) .44.
D) .45.

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 = $160,000 - $90,000 = $70,000. Gross Profit Rate = $70,000 / $160,000 = 0.4375, which rounds to 0.44.

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

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