Teal Mountain Inc.'s Exciting Gross Profit Rate Calculation!

How does Teal Mountain Inc. calculate its gross profit rate?

What is Teal Mountain Inc.'s gross profit rate?

Calculating Teal Mountain Inc.'s Gross Profit Rate

Teal Mountain Inc. calculates its gross profit rate by subtracting the cost of goods sold from its net sales and then dividing the result by net sales.

Teal Mountain Inc.'s Gross Profit Rate

The gross profit rate for Teal Mountain Inc. is 23%.

Teal Mountain Inc. has an exciting way of calculating its gross profit rate that results in a favorable percentage. By subtracting the cost of goods sold from net sales and then expressing the difference as a percentage of net sales, they are able to determine their gross profit rate.

In the case of Teal Mountain Inc., with net sales of $405,000 and cost of goods sold of $328,000, the calculation is as follows:

Gross Profit = Net Sales - Cost of Goods Sold

Gross Profit = $405,000 - $328,000 = $77,000

Gross Profit Rate = (Gross Profit / Net Sales) x 100%

Gross Profit Rate = ($77,000 / $405,000) x 100% = 19%

Therefore, Teal Mountain Inc. has a gross profit rate of approximately 19%. This rate indicates how efficiently the company generates profit from its sales after accounting for production costs.

A gross profit rate of 19% suggests that for every dollar of net sales, Teal Mountain Inc. retains $0.19 as gross profit, showcasing good profitability and efficient cost management.