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Math  /  Numbers & Operations

QuestionCompute the gross profit for Jefferson Company based on the following: Sales Selling expenses \$764,000
Cost of goods sold 42,500 a. $183,500\$ 183,500 b. $721,500\$ 721,500 c. $495,500\$ 495,500 d. $226,000\$ 226,000

Studdy Solution

STEP 1

1. Gross profit is calculated as Sales minus Cost of Goods Sold (COGS).
2. Selling expenses are not included in the calculation of gross profit.

STEP 2

1. Identify the relevant figures.
2. Calculate the gross profit.

STEP 3

Identify the relevant figures needed to calculate gross profit: - Sales: $764,000 \$764,000 - Cost of Goods Sold (COGS): $538,000 \$538,000

STEP 4

Use the formula for gross profit:
Gross Profit=Sales−Cost of Goods Sold\text{Gross Profit} = \text{Sales} - \text{Cost of Goods Sold}
Substitute the given values:
Gross Profit=$764,000−$538,000\text{Gross Profit} = \$764,000 - \$538,000

STEP 5

Perform the subtraction to find the gross profit:
Gross Profit=$764,000−$538,000=$226,000\text{Gross Profit} = \$764,000 - \$538,000 = \$226,000
The gross profit for Jefferson Company is:
$226,000\boxed{\$226,000}

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