Question

gross profit is calculated by
a. adding sales to operating expenses.
b. subtracting operating expenses from sales.
c. subtracting cost of goods sold from sales.
d. adding profit to sales.

Explanation:

Gross profit represents the core profit from a company's direct production or sales of goods, calculated by removing the direct costs of producing/acquiring those goods from total sales revenue. Operating expenses are used for calculating operating profit, not gross profit, and adding values to sales does not align with profit calculation logic.

Answer:

C. subtracting cost of goods sold from sales.