Net sales for the year were $325,000 and cost of goods sold was $240,500 for the companys existing products. A new product is presently under development and has an expected selling price of $40 per unit in order to remain competitive with similar products in the marketplace.

The dollar amount of gross profit and the gross profit ratio for the year were:

a) $324,000 and 100%, respectively.

b) $84,500 and 26%, respectively.

c) $240,500 and 74%, respectively.

d) $83,500 and 74%, respectively.