The gross profit formula is the total revenue minus cost of things sold. It is the company’s profit before all interest and tax payments. Gross profit is also called gross margin. Find below the formula to calculate the gross profit of a company.
Formula for Gross Profit
The gross profit formula is given as:
|Gross Profit = Revenue – Cost of Goods Sold|
Also Check: Profit Calculator
Example Questions Using Gross Profit Formula
Question 1: If the cost of a fan is 5.30 dollar and sold at 7.90 dollars. Find the gross profit?
Given Revenue = $5.30
Selling price = $7.90
Gross Profit = Revenue – Cost of Goods
Gross Profit = 7.90 – 5.30
Gross Profit = $2.6
Question 2: If the cost of a toy is 6.70 dollar and sold at 10.00 dollar. Find the gross profit?
Given Revenue = $6.70
Selling price = $10
Gross Profit = 10 – 6.70
Gross Profit = $3.3