A-Rod Fishing Supplies had sales of \(2,500,000 and cost of goods sold of \)1,710,000. Selling and administrative expenses represented 10 percent of sales. Depreciation was 6 percent of the total assets of $4,680,000. What was the firm’s operating profit?

Short Answer

Expert verified

The operating profit of A-Rod fishing supplies: $259,200

Step by step solution

01

Given are the following amounts 

Particulars

Amount ($)

Sales

2,500,000

Cost of goods sold

1,710,000

Selling and administrative expense (10% of sales)

250,000

Depreciation (6% of $4,680,000)

280,800

02

Calculation of the firm’s operating profit

Operatingprofit=Sales-Costofgoodssold-Sellingandadministrativeexpense-Depreciation=$2,500,000-$1,720,000-$250,000-$280,800=$259,200

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