Gross and net Profit.

Question 1

What is the cost of sales?

Answer 1

The cost of producing the product.

Question 2

What is the cost of sales the total of?

Answer 2

All of the direct costs.

Question 3

What is gross profit?

Answer 3

The money left once the cost of sales is taken away from the revenue.

Question 4

Can a gross profit be negative?

Answer 4

Yes.

Question 5

Can a gross profit be positive?

Answer 5

Yes.

Question 6

What is revenue?

Answer 6

All of the money a business receives.

Question 7

What is the formula for gross profit?

Answer 7

revenue - cost of sales

Question 8

MegaJane sells cake. In 2012, her revenue was £525 and her cost of sales was £300. Calculate her gross profit in 2012.

Answer 8

£225

Question 9

Will the net profit be positive if the gross profit is positive?

Answer 9

Not always.

Question 10

Will the net profit be negative if the gross profit is negative?

Answer 10

Yes, as there would be nothing to deduct overheads from, so there would be no chance to make profit.

Question 11

What is net profit?

Answer 11

The money left over once all costs are deducted.

Question 12

What is the formula for net profit?

Answer 12

gross profit - expenditure