Financial information is presented below: $$\begin{array} { l r }
\text { Operating Expenses } & \$ 90,000 \
\text { Sales Returns and Allowances } & 26,000 \
\text { Sales Discounts } & 12,000 \
\text { Sales Revenue } & 300,000 \
\text { Cost of Goods Sold } & 158,000
\end{array}$$ The gross profit rate would be
A) .347.
B) .397.
C) .473.
D) .542.

Question

Financial information is presented below: $$\begin{array} { l r } 
\text { Operating Expenses } & \$ 90,000 \
\text { Sales Returns and Allowances } & 26,000 \
\text { Sales Discounts } & 12,000 \
\text { Sales Revenue } & 300,000 \
\text { Cost of Goods Sold } & 158,000
\end{array}$$ The gross profit rate would be
A) .347.
B) .397.
C) .473.
D) .542.

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 = $300,000 - $158,000 = $142,000. Gross Profit Rate = $142,000 / $300,000 = 0.473.

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

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