Response 3:
Yes. After deducting $195 for operating expenses and setting aside $300 for taxes, you actually earned a net profit of $2,505 for the first three months.
No, you forgot to subtract your operating expenses.
Response 3:
Yes. After deducting $195 for operating expenses and setting aside $300 for taxes, you actually earned a net profit of $2,505 for the first three months.
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| Lesson 3 Screen 10a | |
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Financial Reality Now it is June 30th and your first three-months have past. You actually sold only 400 units. Your total sales were $6,000. Your cost of goods sold was $3,000 (400 x $7.50). Does your operating expense go down? No, those expenses stay the same no matter how many sales you make. Your tax rate will also stay the same, but you won’t owe as much tax because you didn’t earn as much money.
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What is your actual net profit for the first three months of business? |
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