Wendell's Bicycles Store Buys Bicycles on Average for $500 and Sells

question 175

Multiple Choice

Wendell's Bicycles store buys bicycles on average for $500 and sells them on average for $800. He pays a sales commission of 10% of sales revenue to his sales staff. Wendell pays $1,500 a month rent for his store, and also pays $3,000 a month to his staff in addition to the commissions. Wendell sold 100 bicycles in June.
-If Wendell prepares a traditional income statement for the month of June, what would be his gross profit?

• A) $130,000
• B) $80,000
• C) $30,000
• D) $50,000

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Definitions:

Percentage Calculation

The mathematical process of finding a part or portion of a number in terms of 100.

Percentage Calculation

The process of finding a part of a whole number or quantity, typically expressed as a fraction of 100.

Tax Rate

The percentage at which an individual or corporation is taxed.

Income Tax

A tax levied by a government directly on individuals' or organizations' income.