COST ACCOUNTING
FINANCIAL TERMINOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is the formula for gross profit?
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price per item x quantity
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current assets + fixed assets
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turnover-cost of sales
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gross profit-expenses
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Explanation:
Detailed explanation-1: -What is the gross profit formula? The gross profit formula is: Gross Profit = Revenue – Cost of Goods Sold.
Detailed explanation-2: -The cost of sales is calculated as beginning inventory + purchases-ending inventory. The cost of sales does not include any general and administrative expenses.
Detailed explanation-3: -To calculate the annual turnover of a company, simply add together the total sales. If the business sells products, the annual turnover refers to the total number of sales from the products sold. If the company sell services, the turnover is the total charged for these services.
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