Question

A company has net sales of $612,850 and cost of goods sold of $441,252. The company's gross profit percentage is:

A. 0.28%.
B. 38.9%.
C. 72%.
D. 28%.

Answer 1

The gross profit is calculated as net sales minus the cost of goods sold ($612,850 - $441,252), which equals $171,598. Using this gross profit, the gross profit percentage is calculated to be 28%.

Step-by-step explanation:

To calculate the gross profit percentage, we need to apply the following formula:

Gross Profit Percentage = (Gross Profit / Net Sales) × 100

The first step to find the gross profit is to subtract the cost of goods sold from the net sales:

Gross Profit = Net Sales - Cost of Goods Sold

= $612,850 - $441,252

= $171,598

The next step is to calculate the gross profit percentage using the formula:

Gross Profit Percentage = ($171,598 / $612,850) × 100

= 0.28 × 100

= 28%

So, the company's gross profit percentage is 28%, which corresponds to option D.