Final answer:
The gross profit of a banquet facility with a total revenue of $85,500 and a cost of goods sold of $21,856 is $63,644.
Step-by-step explanation:
The gross profit of a banquet facility is a fundamental financial metric that provides insights into the profitability of its core operations. Gross profit is determined by subtracting the cost of goods sold (COGS) from the total revenue generated by the facility.
In the given scenario, the total revenue for the banquet facility is $85,500. The cost of goods sold, representing the direct costs associated with providing the banquet services, is $21,856. To calculate the gross profit, you subtract the COGS from the total revenue:
\[ \text{Gross Profit} = \text{Total Revenue} - \text{Cost of Goods Sold} \]
\[ \text{Gross Profit} = $85,500 - $21,856 \]
\[ \text{Gross Profit} = $63,644 \]
Therefore, the gross profit for the banquet facility is $63,644. This figure represents the amount available to cover other operating expenses, contribute to net profit, and reinvest in the business. A positive gross profit indicates that the facility's core operations are generating revenue above the direct costs, reflecting a healthy financial position. It serves as a key indicator for assessing the efficiency and profitability of the banquet facility's primary activities, laying the groundwork for further financial analysis and decision-making.