If Hostell Company Has Net Sales of $500,000 and Cost

question 175

Multiple Choice

If Hostell Company has net sales of $500,000 and cost of goods sold of $350,000, Hostell's gross profit rate is

• A)70%.
• B)30%.
• C)43%.
• D)100%.

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Definitions:

Finished Goods Inventory

The stock of completed products available for sale.

Unit Sales

The total quantity of an inventory item that a business sells to its customers within a specific period.

Credit Sales

Sales made on credit, which allow the buyer to pay the seller at a later date, typically recorded as accounts receivable.

Cash Expenditures

The total amount of money a company spends on acquiring physical goods, services, or assets in a given period.