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22 August, 10:20

Campus Stop is considering a contract to sell merchandise to a campus organization for $23,000. This merchandise will cost Campus Stop $14,400. Would this contract increase (or decrease) Campus Stop's dollars of gross profit and its gross profit percentage?

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  1. 22 August, 13:22
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    Gross profit = $8,600

    Gross profit percentage = increase by 37.39%

    Explanation:

    The formula to compute the gross profit is shown below:

    = Sales revenue - the cost of goods sold

    Or

    = Sale value of merchandise - the cost of the merchandise

    = $23,000 - $14,400

    = $8,600

    The computation of the gross profit percentage is shown below:

    = (Gross profit : Sales revenue) * 100

    = ($8,600 : $23,000) * 100

    = 37.39%

    Hence, the gross profit is increased by 37.39%
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