**Gross profit = Revenue − Cost of Sales only** = $500,000 − $320,000 = **$180,000 → B**

The trick here is that **Other Income is not included in gross profit**. It gets added _after_ gross profit is calculated. This is a common exam trap — they give you extra numbers to see if you'll throw them in too early.

The order on the income statement goes:

1. Revenue − Cost of Sales = **Gross Profit**
2. Gross Profit + Other Income = subtotal
3. Then subtract general expenses to get to net profit