A manufacturing firm's records show: Cost of production ₦600,000; Opening stock of finished goods ₦80,000; Closing stock of finished goods ₦95,000; Sales ₦850,000. What is the gross profit?

Cost of goods sold = Opening finished goods + Cost of production − Closing finished goods = ₦80,000 + ₦600,000 − ₦95,000 = ₦585,000. Gross profit = Sales − Cost of goods sold = ₦850,000 − ₦585,000 = ₦265,000. Forgetting to adjust for finished goods stock gives ₦250,000, a typical distractor error.