A retail chain sells 100 designer sheet sets for $199.99 a set; these sheet sets cost the company $69.95 a set to buy.The company also sells 1,000 basic sheet sets for $49.99 a set; these sheet sets cost the company $24.99 to buy.Other operating expenses total $10,000.Which of the following statements is true?
A)The company's net income is $38,004.
B)Rounded to the nearest whole number,the gross profit percentage is 65% on the designer sheets and 50% on the basic sheets.
C)The company's gross profit is $28,004.
D)All of the answers are acceptable.

Question

Quizplus · Accepted Answer

Net sales = ($199.99 * 100)+ ($49.99 * 1,000)= $69,989 COGS = ($69.95 * 100)+ ($24.99 * 1,000)= $31,985 Net Sales $69,989 - COGS $31,985 = Gross Profit $38,004 - operating expenses $10,000 = Net Income $28,004 Gross Profit% = [(Net Sales - COGS)/Net Sales] * 100 GP% for Designer Sheets = [($199.99 - $69.95)/$199.99] * 100 = 65% GP% for Basic Sheets = [($49.99 - $24.99)/$49.99] * 100 = 50%

A Retail Chain Sells 100 Designer Sheet Sets for $199