If net sales are $800000 and cost of goods sold is $600000 the gross profit rate is 25%.

Net Sales

Net sales is the total revenue from goods and services sold by a business, minus returns, allowances, and discounts, indicating the actual sales revenue.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material, labor, and overhead costs.

Gross Profit Rate

A financial metric that measures a company's gross profit as a percentage of its net sales, indicating the efficiency of production and pricing.

Understand the importance and methodology behind calculating gross profit within merchandising businesses.

Verified Answer

Srikrishna Nagaraj7 days ago

Final Answer :

True

Explanation :

Gross profit rate is calculated as (Net Sales - Cost of goods sold) / Net Sales. So in this case, it would be (800000-600000)/800000 = 0.25 or 25%.

Learning Objectives

Understand the importance and methodology behind calculating gross profit within merchandising businesses.

If net sales are $800000 and cost of goods sold is $600000 the gross profit rate is 25%.

Definitions

Learning Objectives

Learning Objectives

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