Financial information is presented below: Operating expenses $ 32000
Sales returns and allowances 6000
Sales discounts 5000
Sales revenue 190000
Cost of goods sold 93000
Gross profit would be:
a. 0.34.
b. 0.40.
c. 0.36.
d. 0.64.

0.49

Explanation:

First, we need to compute gross profit. See computation of gross profit below;

Sales revenue

$190,000

Less :

Sales returns and allowance

($6,000)

Net sales

$184,000

Less:

Cost of goods sold

($93,000)

Gross profit

$91,000

Therefore,

Gross profit rate = Gross profit ÷ Sales

Gross profit = $91,000 ÷ $184,000

Gross profit rate = 0.49

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