A company’s net sales are ₹15,00,000; the cost of sales is ₹10,00,000 and indirect expenses are ₹3,00,000, then what is the amount of gross profit?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹5,00,000.
Gross profit = Net sales- COGS
= 15,00,000 - 10,00,000
= 5,00,000
* Indirect expenses are not considered while calculating gross profit. It is subtracted while calculating net profit.