chapter 8 mfb

Gross profit is net sales minus the cost of bringing merchandise into the store.

• TRUE

• FALSE

Operating expenses are the unusual expense of doing business.

• TRUE

• FALSE

Gross profit plus operating expenses equals net income.

• TRUE

• FALSE

Markup represents an amount needed to cover operating expenses.

• TRUE

• FALSE

Selling price = cost − markup.

• TRUE

• FALSE

When markups are based on cost, the selling price is 100%.

• TRUE

• FALSE

The amount of markup is represented as the portion only when markups are based on cost.

• TRUE

• FALSE

The selling price can be calculated if the cost and the percent markup on cost are given.

• TRUE

• FALSE

Actual cost is equal to the cost times the markup percent on cost plus 1.

• TRUE

• FALSE

Cost is equal to the selling price divided by (1 + markup percent on cost) when markup is based on cost.

• TRUE

• FALSE