Homework (HT2.3- Gross Profit)

What is the formula for calculating Gross Profit?

• Revenue - Operating Expenses

• Revenue - Cost of Goods Sold

• Revenue - Taxes

• Revenue - Net Profit

Which of the following is a factor that can affect Gross Profit?

• Interest Rates

• Cost of Goods Sold

• Employee Satisfaction

• Tax Rates

Why is Gross Profit important for a business?

• It shows the total revenue of the business.

• It indicates the profitability of core business activities.

• It reflects the total expenses of the business.

• It determines the tax liability of the business.

If a company has a revenue of £500,000 and a Cost of Goods Sold of £300,000, what is the Gross Profit?

• £200,000

• £300,000

• £500,000

• £800,000

Which of the following would likely increase a company's Gross Profit?

• Increasing the cost of raw materials

• Reducing the selling price of products

• Increasing sales volume while maintaining the same cost of goods sold

• Increasing employee wages

How does a decrease in the Cost of Goods Sold affect Gross Profit?

• It decreases Gross Profit.

• It has no effect on Gross Profit.

• It increases Gross Profit.

• It doubles the Gross Profit.

Which of the following is NOT included in the calculation of Gross Profit?

• Revenue

• Cost of Goods Sold

• Operating Expenses

• Sales Returns

A company sells 1,000 units of a product at £50 each. The Cost of Goods Sold per unit is £30. What is the Gross Profit?

• £20,000

• £30,000

• £50,000

• £70,000

Which of the following statements is true about Gross Profit?

• Gross Profit is the same as Net Profit.

• Gross Profit includes all business expenses.

• Gross Profit is calculated before deducting operating expenses.

• Gross Profit is irrelevant to business performance.

If a business wants to improve its Gross Profit, which strategy might it consider?

• Increasing the cost of goods sold

• Reducing the quality of products

• Increasing the selling price of products

• Increasing administrative expenses