Concept:Gross profit is calculated by subtracting the cost of goods sold from net sales.
Explanation:First, find net sales by deducting returns inwards from total sales.
Net Sales=10,900−600=10,300Next, calculate cost of goods sold using opening stock, purchases, carriage inwards, returns outwards, and closing stock.
COGS=1,000+4,000+200−800−2,000=2,400Carriage outwards is not included because it is an administrative expense, not part of production cost.
Finally, subtract the cost of goods sold from net sales.
Gross Profit=10,300−2,400=7,900Answer:B.
N7,900