Gross profit on a pro-forma income statement is calculated as
A)Budgeted sales revenue minus contribution margin.
B)Budgeted sales revenue minus budgeted cost of goods sold.
C)Budgeted sales revenue minus product cost and period cost.
D)None of these ans choices are correct.

Question

Quizplus · Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold from total sales revenue. Therefore, the correct option is B which states that gross profit is calculated as budgeted sales revenue minus budgeted cost of goods sold. Options A and C are incorrect as they either subtract contribution margin or both product cost and period cost from sales revenue. Option D states that none of the answer choices are correct, which is not true in this case as option B is the correct answer.

Gross Profit on a Pro-Forma Income Statement Is Calculated as