Historically, in the rural retail grocery industry, cost of goods sold averages 75% of sales. If next year's sales are expected to be $1,600,000, the gross profit forecast would be $1,200,000.

Question

Quizplus · Accepted Answer

Gross profit is calculated as sales minus the cost of goods sold. If the cost of goods sold is 75% of sales, then the gross profit would be 25% of sales. Therefore, the gross profit forecast would be $400,000, not $1,200,000.

Historically, in the Rural Retail Grocery Industry, Cost of Goods