If cost of goods sold is $480,000 and the gross profit rate is 40%,what is the gross profit?

Question

Quizplus · Accepted Answer

Gross profit is calculated as sales minus cost of goods sold. Given a gross profit rate of 40%, it means that the gross profit is 40% of sales. To find the gross profit, we can set up the equation: Gross Profit = Sales - Cost of Goods Sold. Since the gross profit rate is 40%, it implies that Cost of Goods Sold is 60% of Sales (100% - 40% = 60%). Therefore, if Cost of Goods Sold is $480,000, representing 60% of Sales, we can find Sales by dividing $480,000 by 60% (or 0.6), which gives us $800,000 as Sales. Subtracting the Cost of Goods Sold ($480,000) from Sales ($800,000) gives us a Gross Profit of $320,000.

If Cost of Goods Sold Is $480,000 and the Gross