To compute departmental gross profit, it is necessary to determine the net sales, purchases, and inventory by departments.

Question

Quizplus · Accepted Answer

Departmental gross profit is calculated by subtracting the cost of goods sold (which is determined by purchases and changes in inventory value) from net departmental sales. Therefore, it is necessary to determine net sales, purchases, and inventory by departments in order to calculate departmental gross profit.

To Compute Departmental Gross Profit, It Is Necessary to Determine