Commerce Exam > Commerce Questions > What is the formula for calculating "Gross Pr...
Start Learning for Free
What is the formula for calculating "Gross Profit per Unit"?
- a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expenses
- b)Gross Profit per Unit = Total Sales - Total Cost of Goods Sold
- c)Gross Profit per Unit = Total Revenue - Fixed Expenses
- d)Gross Profit per Unit = Total Sales - Variable Costs
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
What is the formula for calculating "Gross Profit per Unit"?a)Gross Pr...
Answer:
Gross profit per unit is a financial measure that helps businesses determine the profitability of each unit of a product or service sold. It is calculated by subtracting the total cost of goods sold from the total sales revenue, and is expressed as a monetary value.
The formula for calculating gross profit per unit is:
Gross Profit per Unit = Total Sales - Total Cost of Goods Sold
Explanation:
To understand the formula for calculating gross profit per unit, let's break it down into its components:
1. Total Sales:
Total sales refer to the total amount of revenue generated from the sale of products or services. It includes all sales made during a specific period.
2. Total Cost of Goods Sold (COGS):
The total cost of goods sold represents the direct costs associated with producing or acquiring the goods being sold. It includes the cost of raw materials, direct labor, and any other expenses directly related to the production or acquisition of the goods.
3. Gross Profit:
Gross profit is the profit a company makes after deducting the cost of goods sold from its total sales revenue. It represents the amount of money left over to cover other expenses and generate net profit.
By subtracting the total cost of goods sold from the total sales revenue, we can determine the gross profit. Dividing the gross profit by the number of units sold gives us the gross profit per unit.
Calculating the gross profit per unit is important for businesses as it helps in analyzing the profitability of each unit sold. It provides insights into the pricing strategy, cost efficiency, and overall profitability of a product or service.
Example:
Let's consider an example to illustrate the calculation of gross profit per unit:
Total Sales Revenue: $10,000
Total Cost of Goods Sold: $6,000
Number of Units Sold: 1,000
Using the formula, we can calculate the gross profit per unit as follows:
Gross Profit per Unit = Total Sales - Total Cost of Goods Sold
Gross Profit per Unit = $10,000 - $6,000
Gross Profit per Unit = $4,000
In this example, the gross profit per unit is $4, which means that for each unit sold, the company earns a gross profit of $4.
By analyzing the gross profit per unit, businesses can make informed decisions about pricing, cost management, and overall profitability. It helps in identifying areas of improvement and optimizing the financial performance of the business.
Gross profit per unit is a financial measure that helps businesses determine the profitability of each unit of a product or service sold. It is calculated by subtracting the total cost of goods sold from the total sales revenue, and is expressed as a monetary value.
The formula for calculating gross profit per unit is:
Gross Profit per Unit = Total Sales - Total Cost of Goods Sold
Explanation:
To understand the formula for calculating gross profit per unit, let's break it down into its components:
1. Total Sales:
Total sales refer to the total amount of revenue generated from the sale of products or services. It includes all sales made during a specific period.
2. Total Cost of Goods Sold (COGS):
The total cost of goods sold represents the direct costs associated with producing or acquiring the goods being sold. It includes the cost of raw materials, direct labor, and any other expenses directly related to the production or acquisition of the goods.
3. Gross Profit:
Gross profit is the profit a company makes after deducting the cost of goods sold from its total sales revenue. It represents the amount of money left over to cover other expenses and generate net profit.
By subtracting the total cost of goods sold from the total sales revenue, we can determine the gross profit. Dividing the gross profit by the number of units sold gives us the gross profit per unit.
Calculating the gross profit per unit is important for businesses as it helps in analyzing the profitability of each unit sold. It provides insights into the pricing strategy, cost efficiency, and overall profitability of a product or service.
Example:
Let's consider an example to illustrate the calculation of gross profit per unit:
Total Sales Revenue: $10,000
Total Cost of Goods Sold: $6,000
Number of Units Sold: 1,000
Using the formula, we can calculate the gross profit per unit as follows:
Gross Profit per Unit = Total Sales - Total Cost of Goods Sold
Gross Profit per Unit = $10,000 - $6,000
Gross Profit per Unit = $4,000
In this example, the gross profit per unit is $4, which means that for each unit sold, the company earns a gross profit of $4.
By analyzing the gross profit per unit, businesses can make informed decisions about pricing, cost management, and overall profitability. It helps in identifying areas of improvement and optimizing the financial performance of the business.
Free Test
FREE
| Start Free Test |
Community Answer
What is the formula for calculating "Gross Profit per Unit"?a)Gross Pr...
The formula for calculating Gross Profit per Unit is Gross Profit per Unit = Total Sales - Total Cost of Goods Sold. It represents the profit earned from the sale of one unit of a particular product after deducting the cost of producing that unit.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer?
Question Description
What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer?.
What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer?.
Solutions for What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice What is the formula for calculating "Gross Profit per Unit"?a)Gross Profit per Unit = Total Sales Revenue - Total Sales Expensesb)Gross Profit per Unit = Total Sales - Total Cost of Goods Soldc)Gross Profit per Unit = Total Revenue - Fixed Expensesd)Gross Profit per Unit = Total Sales - Variable CostsCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup