Net sales for the year were $325,000 and cost of goods sold was $240,500 for the company's existing products. A new product is presently under development and has an expected selling price of $40 per unit in order to remain competitive with similar products in the marketplace. The dollar amount of gross profit and the gross profit ratio for the year were:

Gross profit = 84,500.00

Gross profit ratio = = 26%

Explanation:

Gross profit is sales less cost of goods sold. And the gross profit margin the percentage of sales made as gross profit.

Gross profit = sales - cost of goods sold

= 325,000 - 240,500

= 84,500.00

Gross profit ratio = Gross profit/sales * 100

= 84,500/325,000 * 100

= 26%

Gross profit = 84,500.00

Gross profit ratio = = 26%