GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A company sells $100 worth of products. It cost them $75 to make the products. What is the profit?
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$75
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$175
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$25
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There is no profit.
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Explanation:
Detailed explanation-1: -For example, if a product sells for $100 and its cost of goods sold is $75, the gross profit is $25 and the gross margin (gross profit as a percentage of the selling price) is 25% ($25/$100).
Detailed explanation-2: -When the selling price and the cost price of a product is given, the profit can be calculated using the formula, Profit = Selling Price-Cost Price. After this, the profit percentage formula that is used is, Profit percentage = (Profit/Cost Price) × 100.
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