Question

If a company's revenue is $530,000, profit before taxes is $98,000, and product costs are $390,000 then:a)The company's gross margin totals $98,000 b)The company's period costs total $140,000. c)The company's period costs cannot be determined d)The company's contribution margin totals $140,000 e)The company's gross margin totals $140,000

Answer 1

Answer: Option (e) is correct.

Step-by-step explanation:

Given that,

Company's revenue = $530,000

Profit before taxes = $98,000

Product costs = $390,000

Company's gross margin = Company's revenue - Product costs

= $530,000 - $390,000

= $140,000

Therefore, The company's gross margin totals $140,000.