If cost of goods sold is $360,000 and the gross profit rate is 40%,what is the gross profit?

Question

Quizplus · Accepted Answer

Gross profit is calculated by deducting cost of goods sold from revenue. Gross profit rate is the percentage of gross profit out of revenue. 
Let's assume revenue is X.
Gross profit rate = Gross profit / Revenue
 40% = Gross profit / X
Gross profit = 0.4X
We know cost of goods sold = X - Gross profit
Substituting the given values and solving, we get:
$360,000 = X - 0.4X
$360,000 = 0.6X
X = $600,000
Therefore, Gross profit = 0.4X = 0.4($600,000) =$240,000. Option A is the correct answer.

If Cost of Goods Sold Is $360,000 and the Gross