Question

A company's gross profit (or gross margin) was $84,000 and its net sales were $350,000. Its...

A company's gross profit (or gross margin) was $84,000 and its net sales were $350,000. Its gross margin ratio is:

Multiple Choice

  • $264,050.

  • 24%.

  • 75%.

  • 4%.

  • $83,750.

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Homework Answers

Answer #1

Based on the information available in the question, we can calculate the Gross Margin ratio as follows:-

Gross Margin ratio = Gross Margin/Sales * 100

Gross Margin ratio = $84,000/$350,000 * 100

Gross Margin Ratio = 24%

The correct answer based on the calculation above is Option B - 24%.

Option A and Option E are incorrect as $264,050 and $83,750 is not the correct answer. A gross margin ratio is measured in terms of percentage.

Option C and Option D are incorrect as these percentages reflect the incorrect percentages.

Please let me know if you have any questions via comments and all the best :) !

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