Calculate the percent change in gross profit from Quarter 1 to Quarter 2 using the following income statement information:

\begin{tabular}{lcc}
& Q1 [tex][tex]$(\times 1000)$[/tex][/tex] & Q2 [tex][tex]$(\times 1000)$[/tex][/tex] \\
Net Sales & 115 & 175 \\
COGS & 33 & 35 \\
Gross Profit & 82 & 140 \\
Overhead & 32 & 51 \\
Net Income & 50 & 89
\end{tabular}

Percent Change [tex][tex]$=[$[/tex][/tex] ? [tex][tex]$] \%$[/tex][/tex]



Answer :

To calculate the percent change in gross profit from Quarter 1 (Q1) to Quarter 2 (Q2), we follow these steps:

1. Identify the gross profit for each quarter:
- Gross Profit for Q1 = 82 (thousands)
- Gross Profit for Q2 = 140 (thousands)

2. Compute the change in gross profit:
[tex]\[ \text{Change in Gross Profit} = \text{Gross Profit for Q2} - \text{Gross Profit for Q1} \][/tex]
Substituting the values:
[tex]\[ \text{Change in Gross Profit} = 140 - 82 = 58 \text{ (thousands)} \][/tex]

3. Calculate the percent change in gross profit:
[tex]\[ \text{Percent Change} = \left( \frac{\text{Change in Gross Profit}}{\text{Gross Profit for Q1}} \right) \times 100 \][/tex]
Substituting the known values:
[tex]\[ \text{Percent Change} = \left( \frac{58}{82} \right) \times 100 \][/tex]

4. Perform the division and multiplication:
[tex]\[ \left( \frac{58}{82} \right) \times 100 \approx 70.73170731707317 \][/tex]

Therefore, the percent change in gross profit from Quarter 1 to Quarter 2 is approximately:
[tex]\[ 70.73\% \][/tex]