Question

A-Rod Fishing Supplies had sales of $2,150,000 and cost of goods sold of $1,500,000. Selling and administrative expenses represented 10 percent of sales. Depreciation was 5 percent of the total assets of $4,410,000. What was the firm's operating profit?

Answer 1

Answer:

Operating profit will be equal to $214500

Explanation:

We have given sales = $2150000

Cost of goods sold = $1500000

It is given that selling and administrative expense is 10% of the sale

So selling and  administrative expense will be equal; to $=\frac{2150000\times 10}{100}=215000$$

Depreciation is 55 of total assets of $4410000

So depreciation $=\frac{4410000\times 5}{100}=220500$ $

So operating profit will be equal to = $2150000 - $1500000-$215000-$220500 = $214500

So operating profit will be equal to $214500