Based on the sales and cost of merchandise, the gross profit to Jefferson Company was $226,000
How to find the gross profit?
Gross Profit is calculated on the basis of sales revenue and the cost of the goods that were sold to earn that revenue.
This means that the formula for gross profit is:
= Sales revenue - Cost of sales or merchandise
Sales revenue to Jefferson company = $764,000
Cost of merchandise to Jefferson Company = $538,000
The gross profit is therefore:
= 764,000 - 538,000
= $226,000
In conclusion, the gross profit is $226,000.
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