If XYZ Company has net sales of \$500,000 and cost of goods sold of \$320,000, the gross profit percentage is:

• A. 18%
• B. 36%
• C. 48%
• D. 64%

Answer: (B)

Verified step by step guidance

1. Start by understanding the formula for Gross Profit, which is: Gross Profit = Net Sales - Cost of Goods Sold (COGS).
2. Calculate the Gross Profit by subtracting the Cost of Goods Sold from the Net Sales: \$500,000 - \$320,000.
3. Once you have the Gross Profit, use the formula for Gross Profit Percentage: (Gross Profit / Net Sales) * 100.
4. Substitute the values into the formula: (Gross Profit / \$500,000) * 100.
5. Calculate the Gross Profit Percentage to determine which of the given options is correct.