Business

Name: Date Taken:

Class: Total Possible Marks: 26

Gross Profit Basics
Complete the following questions in the time allowed by your teacher

QUICK DEFINITIONS
Write a short, accurate definition for each of the following key terms. (2 marks for each good quality definition)
1. 2 Sales revenue (or turnover) refers to the total value of sales achieved in a particular period. It is the value of invoiced goods and services to customers. 2. 2 Cost of sales is the total cost of directly producing or buying the goods and services sold in a period. For example, for a manufacturing business, cost of sales would include raw materials, components, bought-in goods and other direct costs of production including labour and energy. 3. 2 The gross profit margin is a measure of profitability. It is calculated as a percentage, where gross profit is divided by sales revenue. 4. 2 Gross profit margin (%) = (gross profit / sales revenue) x 100 What is the formula for the gross profit margin? Define: Gross profit margin Define: cost of sales Define: sales revenue

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PRACTICE CALCULATIONS

5. 4

Calculate the missing data in the table above: Product A: Cost of Sales = Product B: Sales Revenue = Product C: Gross Profit = Product D: Gross Profit Margin = Product A: Cost of Sales = £37,500

Product B: Sales Revenue = £75,000

Product C: Gross Profit = £18,000

Product D: Gross Profit Margin = 35%

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-36. 3 The table above shows some financial information for three factories from their monthly production. Which factory made the highest gross profit? (one mark) Which factory achieved the highest gross profit margin (one mark) and what was the percentage? (one mark) Which factory made the highest gross profit? Ipswich

Which factory achieved the highest gross profit margin (one mark) and what was the percentage? Glasgow (22%)

SHORT ANSWERS
In this section, please outline short answers or lists to the...