Question

Gross profit depends upon net sales. (State True or False)

Answer 1

True .Hope this answer will help you

Answer 2

Answer:

The statement is True.

Explanation:

Gross Profit of a company is the profit earned by the company after deducting all the costs that incur during the production of the product. When Cost of goods sold are deducted from the Sales of the company, then Gross Profit is calculated. The formula for the Gross Profit is, Gross Profit = Sales - Cost of Goods Sold, GP=Sales-COGS. Now we can see that Gross profit depends upon the Sales of the company. Higher sales will result in higher gross profits of the company and vice versa. A company can also increase its GP by lowering its COGS.