A Company Shows the Following Balances What Is the Gross Profit Rate?
A) 34%
B) 46

question 85

Multiple Choice

A company shows the following balances: $$\begin{array} { l r } \text { Sales Revenue } & \$ 2,500,000 \\\text { Sales Returns and Allowances } & 400,000 \\\text { Sales Discounts } & 50,000 \\\text { Cost of Goods Sold } & 1,353,000\end{array}$$ What is the gross profit rate?

• A) 34%
• B) 46%
• C) 66%
• D) 54%

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Definitions:

Cost-volume-profit Chart

A graphical representation that shows the relationships between an organization's costs, sales volume, and profits, used for making strategic business decisions.

Total Fixed Cost

The sum of all costs required to produce any goods or services that do not change with the level of production.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit. It measures how much each unit sold contributes to fixed costs and profit.

Break-Even Point

The level of business operations at which revenues and expired costs are equal.