The correct calculation of gross profit is to add up all revenue and subtract the cost of goods sold (COGS). The formula to calculate gross profit is:
Gross Profit = Revenue - Cost of Goods Sold (COGS)
How do you calculate gross profit?
Total all revenue and subtract income taxes.
Add up all sales made for the period.
Total all revenue and subtract COGS, SG&A, and income taxes.
Add up all revenue and subtract the cost of goods sold.
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