Question

Calip Corporation, a merchandising company, reported the following results for October:

Sales	$	406,800
Cost of goods sold (all variable)	$	171,100
Total variable selling expense	$	17,300
Total fixed selling expense	$	14,400
Total variable administrative expense	$	7,800
Total fixed administrative expense	$	30,300

The gross margin for October is:

$362,100

$210,600

$235,700

$165,900

Answer 1

Gross profit is a company’s sales minus its cost of goods sold. It indicates a company’s earnings from its products and services before deducting selling and administrative expenses.

Gross Profit= Sales – Cost of goods sold

                       = $406,800 - $171,100

                       = $235,700.

Hence, the answer is option c.

In case of any query, kindly comment on the solution.