Answer:
COGS (cost of goods sold) = $2,100,000
Gross Profit rate = 0.3
Explanation:
The formula for computing COGS (cost of goods sold) is as
COGS (cost of goods sold) = Beginning inventory + Purchases - Ending inventory
where
Beginning inventory amounts to $600,000
Purchases made during the period is $2,250,000
Ending inventory is $750,000
So, putting the values above:
COGS (cost of goods sold) = $600,000 + $2,250,000 - $750,000
COGS (cost of goods sold) = $2,850,000 - $750,000
COGS (cost of goods sold) = $2,100,000
The formula for computing Gross Profit rate is as:
Gross Profit rate = Gross Profit / Net Sales
where
Gross Profit is computed as:
Gross Profit = Net Sales - COGS
= $3,000,000 - $2,100,000
Gross Profit = $900,000
Net Sales is $3,000,000
So, putting the values above:
Gross Profit rate = $900,000 / $3,000,000
Gross Profit rate = 0.3
