How do you calculate gross profit?
add up all revenue and subtract the cost of goods sold
total all revenue and subtract income taxes
total all revenue and subtract COGS, SG&A, and income taxes
add up all sales made for the period
The correct answer is: add up all revenue and subtract the cost of goods sold.
Gross profit is calculated by subtracting the cost of goods sold (COGS) from the total revenue generated by a business during a specific period. The COGS represents the direct costs associated with producing or acquiring the goods or services sold by the business. Subtracting the COGS from revenue gives the gross profit, which is the amount remaining after accounting for the direct costs of production.