If Net Sales equal 500,000 and CoGS equals 320,000, what is Gross Profit?

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Multiple Choice

If Net Sales equal 500,000 and CoGS equals 320,000, what is Gross Profit?

Explanation:
Gross profit is what you have left from sales after subtracting the direct cost of the goods sold. So you take Net Sales and subtract Cost of Goods Sold. Compute: 500,000 minus 320,000 equals 180,000. This shows the earnings from selling the goods before other expenses. The other numbers come from either using the wrong arithmetic or confusing gross profit with either total sales or the cost itself.

Gross profit is what you have left from sales after subtracting the direct cost of the goods sold. So you take Net Sales and subtract Cost of Goods Sold.

Compute: 500,000 minus 320,000 equals 180,000. This shows the earnings from selling the goods before other expenses.

The other numbers come from either using the wrong arithmetic or confusing gross profit with either total sales or the cost itself.

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