Future Business Leaders of America (FBLA) Marketing Practice Test

What will be the gross profit if Big Company sells Big Squares for $42 each and has a gross profit of $6?

1. $6

2. $10

3. $5

4. $7

The correct answer is: $6

The correct gross profit is identified by understanding the relationship between sales price and cost. When Big Company sells Big Squares for $42 and has a gross profit of $6, the gross profit represents the amount earned on each sale after deducting the cost of goods sold from the selling price. To determine the gross profit, one would calculate it as follows: Gross Profit = Selling Price - Cost of Goods Sold. If the selling price is $42 and the gross profit is already given as $6, this directly means that the profit retained after covering the cost is indeed $6 for each square sold. This clearly aligns with the definition of gross profit as it is the direct income made from sales before accounting for any other operating expenses. Thus, the gross profit of $6 for each Big Square sold accurately reflects the company’s financial gain from those transactions.