Which one of the following best describes "net profit"?

Net profit is a key financial metric that represents the amount of money a business earns after subtracting all costs associated with producing and selling its goods or services. The correct answer captures this definition effectively by stating that net profit is derived from taking the selling price and subtracting the costs incurred.

This understanding is crucial because it highlights the relationship between revenue generated from sales and the overall expenses incurred, which can include direct costs like materials and labor, as well as indirect costs such as overhead. When evaluating a business's financial performance, net profit provides insight into its profitability and operational efficiency.

The other choices do not accurately reflect the concept of net profit. For instance, simply stating the selling price does not account for any costs, which is essential to understanding profit. Additionally, combining selling price with costs or subtracting costs of poor quality (COPQ) does not align with the standard calculation of net profit, as it misrepresents the relationship between sales revenue and total costs involved in generating that revenue.