# CTE Resource Center - Verso - Fashion Marketing Task 751937857

# Calculate gross profit and net profit.

## Definition

Calculation should include income, cost of merchandise, and operating expenses. Gross profit is sales minus the cost of goods sold. Net profit is gross revenue minus all expenses.

## Process/Skill Questions

• How do fashion businesses use their profit?
• What is the relationship between markup and gross profit?
• What is the difference between gross and net profit? Which is true profit? Why?
• What are typical operating expenses of a fashion marketing business?
• What are some examples of fixed and variable costs in a fashion marketing business?
• How does profit relate to markup?
• What expenses are incurred in overhead?
• What are allowances, and how do they affect a retailer’s profit?

## Mathematics

### A.1

The student will
1. represent verbal quantitative situations algebraically; and
2. evaluate algebraic expressions for given replacement values of the variables.

### A.4

The student will solve
1. multistep linear and quadratic equations in one variables algebraically;
2. quadratic equations in one variables algebraically;
3. literal equations for a specified variable;
4. systems of two linear equations in two variables algebraically and graphically; and
5. practical problems involving equations and systems of equations.

## Economics and Personal Finance Standards of Learning

### EPF.2

The student will demonstrate knowledge of the role of producers and consumers in a market economy by
1. describing how consumers, producers, workers, savers, investors, and citizens respond to incentives;
2. explaining how businesses respond to consumer sovereignty;
3. identifying the role of entrepreneurs;
4. comparing the costs and benefits of different forms of business organization, including sole proprietorship, partnership, corporation, franchise, and cooperative;
5. describing how costs and revenues affect profit and supply;
6. describing how increased productivity affects costs of production and standard of living;
7. examining how investment in human capital, capital goods, and technology can improve productivity;
8. describing the effects of competition on producers, sellers, and consumers;
9. explaining why monopolies or collusion among sellers reduces competition and raises prices; and
10. illustrating the circular flow of economic activity.

### EPF.3

The student will demonstrate knowledge of the price system by
1. examining the laws of supply and demand and the determinants of each;
2. explaining how the interaction of supply and demand determines equilibrium price;
3. describing the elasticity of supply and demand; and
4. examining the purposes and implications of price ceilings and price floors.