Question

If Indiana Ink, Inc. has net sales of $400,000 and cost of goods sold of $300,000, Indiana Ink's gross profit rate is:

Answer 1

Gross profit rate= 0.25

Step-by-step explanation:

Giving the following information:

Indiana Ink, Inc. has net sales of $400,000 and the cost of goods sold of $300,000.

To calculate the gross profit rate, we need to use the following formula:

Gross profit rate= gross profit / sales

Gross profit= sales - COGS

Gross profit rate= 100,000/400,000

Gross profit rate= 0.25