During the year,Grasso Ltd sold 2000 items at $30 each.The cost price of the items was $22 each.Operating expenses totalled $7000 and income tax expense was $4000.
-What was the gross profit of Grasso Ltd for the year?
A) $60 000
B) $16 000
C) $11 000
D) $5000

Question

Quizplus · Accepted Answer

Gross Profit = Revenue - Cost of Goods Sold
Revenue = Selling Price x Quantity
Revenue = $30 x 2000 = $60,000
Cost of Goods Sold = Cost Price x Quantity
Cost of Goods Sold = $22 x 2000 = $44,000
Gross Profit = $60,000 - $44,000 = $16,000

Therefore, the answer is B) $16,000.

During the Year,Grasso Ltd Sold 2000 Items at $30 Each