Final answer:
To calculate the gross profit percentage, subtract the cost of goods sold from the net sales revenues to get the gross profit, then divide by net sales revenues and multiply by 100. Hayward Co.'s gross profit percentage is 81.13%. A firm's accounting profit is calculated by subtracting explicit costs from total revenues, which in the given example is $50,000.
Step-by-step explanation:
To calculate the gross profit percentage, we first need to find the gross profit. Gross profit is obtained by subtracting the cost of goods sold (COGS) from net sales revenues. For Hayward Co., the calculation would be:
Gross Profit = Net Sales Revenues - Cost of Goods Sold
= $21.2 billion - $4.0 billion
= $17.2 billion.
Next, we divide the gross profit by the net sales revenues and then multiply by 100 to get the percentage:
Gross Profit Percentage = (Gross Profit ÷ Net Sales Revenues) × 100
= ($17.2 billion ÷ $21.2 billion) × 100
= 0.8113 × 100
= 81.13%.
Therefore, Hayward Co.'s gross profit percentage is 81.13%.
The firm's accounting profit can be calculated by subtracting the explicit costs (labor, capital, materials) from the total revenues:
Accounting Profit = Total Revenues - (Labor Cost + Capital Cost + Materials Cost)
= $1,000,000 - ($600,000 + $150,000 + $200,000)
= $1,000,000 - $950,000
= $50,000.
So, the firm's accounting profit last year was $50,000.