Gross Profit: What is it?
There are some terms you are going to have to learn once you get in business. One of these terms is gross profit. There is a formula for computation of this type of profit. It is this: sales minus cost of goods sold.
What is gross profit?
It is obviously the figure you get after subtracting cost of goods sold from sales. To understand what GP is, exactly, you must first learn to differentiate between variable and fixed costs.
Variable costs entail things like:
• direct labour,
• materials,
• equipment,
• utilities for warehouse or plant,
• depreciate of production equipment
• packaging
• plant supervisor wages
Fixed costs remain the same and they include:
• Office overheads
• Rent
• Professional fees
• Marketing expenditures
• Payroll taxes
• Salaries and wages
• Insurance
Once you learn to separate fixed costs and variable costs you will be able to calculate the gross profit of your business.
Interested in joining our team? Why not apply today?
About Our Traineeships:-
Join the Market Leader in 2016 – Accounting Traineeships
Looking to study a B.Com at University of Newcastle in 2016?
Bottrell Business Consultants are a Multi Award Winning Firm
We have 2016 Traineeships available – work 3 days Study part-time 2 days
Apply now to Tara Skippen on tara@bottrellaccounting.com.au – send resume & cover letter
www.bottrellaccounting.com.au or check us out on Facebook, Twitter, Instagram or LinkedIn
Offices – East Maitland | Newcastle | Sydney | Melbourne | Brisbane | Gold Coast
Bottrell Business Consultants Pty Ltd – Chartered Accountants and Business Advisors.
The Bottrell group incorporates Bottrell Business Consultants, Bottrell Accounting & Taxation, Maitland Accounting & Taxation, East Maitland Accounting Services and Mobile Bookkeeping & Recruitment.
Our group of businesses & links include the following companies (& our websites);-
- Bottrell Accounting & Taxation – Visit out website
- Bottrel Business Consultants Pty Ltd – Visit our website
- Maitland Accounting & Taxation – Visit our website
- East Maitland Accounting Services – Visit our website
- Mobile Bookkeeping & Recruitment – Visit our website
Comments are closed.