Question

"Prather Inc. has sales of $100,000, sales returns of $5,000, cost of goods sold of $60,000, and selling expenses of $3,000. Calculate gross profit."

Answer 1

$35,000

Step-by-step explanation:

By the contribution margin model, gross profit is calculated by subtracting the cost of goods sold from the sales.

For Prather Inc. the sales of $100,000 and sales return of $5000

costs of goods sold $60,000

Net sales will be $95,000( $100,000 -$5,000)

Gross profits will be $95,000 - $60,000

=$35,000