Calculate a department's gross profit on sales given the following: $$\begin{array} {| l | r |}
\hline\text { Sales } & \$ 1,600 \
\hline \text { Operating expenses } & 350 \
\hline \text { Cost of goods sold } & 900 \
\hline
\end{array}$$

Question

Calculate a department's gross profit on sales given the following: $$\begin{array} {| l | r |} 
\hline\text { Sales } & \$ 1,600 \
\hline \text { Operating expenses } & 350 \
\hline \text { Cost of goods sold } & 900 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The department's gross profit on sales is calculated by subtracting the cost of goods sold from the sales: 
Gross profit = Sales - Cost of goods sold = $1,600 - $900 = $700. Then, subtract the operating expenses from the gross profit to find the net profit: 
Net profit = Gross profit - Operating expenses = $700 - $350 = $350. 
Therefore, the department's gross profit on sales is $700.

Calculate a Department's Gross Profit on Sales Given the Following