Accounting for IGCSE & O level - Final Statements (Section 11 - No. 36)
What will happen to the gross profit if the cost of goods sold increases, holding sales constant?
Gross profit will increase
Gross profit will decrease
Gross profit will stay the same
It has no impact on the gross profit
Explication
Gross Profit = Sales - COGS, so if COGS increases, gross profit decreases.