If Net Sales are 120,000 and Cost of Goods Sold is 75,000, what is the Gross Profit?

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Prepare for the Fundamentals of Accountancy, Business, and Management (FABM) 1 Exam. Study efficiently with multiple choice questions and detailed explanations. Enhance your knowledge and succeed in your exam with confidence.

Multiple Choice

If Net Sales are 120,000 and Cost of Goods Sold is 75,000, what is the Gross Profit?

Explanation:
Gross profit is what’s left from selling goods after you’ve paid for the goods themselves. It’s calculated by subtracting cost of goods sold from net sales. Here, net sales are 120,000 and cost of goods sold is 75,000, so 120,000 minus 75,000 equals 45,000. That 45,000 is the gross profit. You can also note that this represents 37.5% of net sales (45,000 divided by 120,000). The other numbers don’t reflect this subtraction.

Gross profit is what’s left from selling goods after you’ve paid for the goods themselves. It’s calculated by subtracting cost of goods sold from net sales. Here, net sales are 120,000 and cost of goods sold is 75,000, so 120,000 minus 75,000 equals 45,000. That 45,000 is the gross profit. You can also note that this represents 37.5% of net sales (45,000 divided by 120,000). The other numbers don’t reflect this subtraction.

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