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Calculate the gross profit ratio for 2011 - HSC - SSCE Business Studies - Question 22 - 2011 - Paper 1

Question 22

Calculate the gross profit ratio for 2011. Show all working. Sales for 2011: $800,000 Cost of Goods Sold for 2011: $200,000 Gross Profit = Sales - Cost of Goods Sol... show full transcript

Worked Solution & Example Answer:Calculate the gross profit ratio for 2011 - HSC - SSCE Business Studies - Question 22 - 2011 - Paper 1

Step 1

Calculate the Gross Profit

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Answer

To find the gross profit for 2011, subtract the Cost of Goods Sold from the Sales.

Gross Profit = Sales - Cost of Goods Sold Gross Profit = 800 - 200 Gross Profit = 600

Step 2

Calculate the Gross Profit Ratio

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Answer

The gross profit ratio is calculated using the formula:

$ext{Gross Profit Ratio} = \left( \frac{\text{Gross Profit}}{\text{Sales}} \right) \times 100$

Substituting the values:

$\text{Gross Profit Ratio} = \left( \frac{600}{800} \right) \times 100 = 75\%$

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