Asked by Jesica Alarcon on Apr 26, 2024
Verified
A company had a gross profit of $300,000 based on sales of $400,000.Its cost of goods sold equals $700,000.
Gross Profit
The financial metric determining the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.
- Master the concept and methodology of computing the cost of goods sold and its impact on a company's gross margin.
Verified Answer
YR
Yamuna RijalMay 02, 2024
Final Answer :
False
Explanation :
This question is mathematically impossible. The company cannot have a gross profit of $300,000 with sales of $400,000 and a cost of goods sold of $700,000. The cost of goods sold would have to be less than or equal to the sales in order to have a gross profit.
Learning Objectives
- Master the concept and methodology of computing the cost of goods sold and its impact on a company's gross margin.