In 1995 a certain store had 1,800 tools in stock that had been purchased for $30 each. If 1,000 of these tools were sold in 1995 for $40 each and the remaining 800 were sold in 1996 for $50 each, how many greater was the gross profit on the tools sold in 1996 than the gross profit on those sold in 1995?

A. $0
B. $6,000
C. $8,000
D. $32,000
E. $40,000

The keyword here is "Gross Profit":

Gross Profit = (Selling Price - Original Price)*(# of Items Sold)

So lets figure out what the Gross Profit for 1995:

GP1995 = (40-30)*(1000) = 10000

And the Gross Profit for 1996:

GP1996 = (50-30)*(800) = 16000

So the difference would be:

16000-10000 = 6000

ANSWER: B. 6000

Hello, I was uncertain about Gross Profit and Net Profit. I chose Answer A, "0" because the sales in 1995 was 40,000.
1000 * 40 = 40,000
In 1996 sales was also 40,000. 800 * 50 = 40,000. So there was no difference. I thought that was Gross profit.

My thinking is that NET profit is the one that would factor on the initial cost of buying all for $30 each.
Thus the NET profit in 1995 is $10 profit * 1000 = $10,000
ANd NET profit in 1996 is $20 * 800 = $16,000

When do I use NET profit vs GROSS profit?