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

1 Answer

6 votes

Answer:

$320,000

Step-by-step explanation:

As we know

Costs of goods sold = Sales - gross profit

where,

Gross profit ratio = 40%

And the cost of goods sold ratio is 60%

Plus the cost of goods sold is $480,000

We assume the sale is 100%

By applying the unitary method, the gross profit would be

=Cost of goods sold ÷ cost of goods sold ratio × Gross profit ratio

= $480,000 ÷ 60% × 40%

= $320,000

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