Question

Lemony Company made sales of $ 32 comma 200 million during 2018. Cost of goods sold for the year totaled $ 12 comma 880 million. At the end of 2017​, Lemony's inventory stood at $ 1 comma 200 ​million, and Lemony ended 2018 with inventory of $ 1 comma 600 million. Compute Lemony's gross profit percentage and rate of inventory turnover for 2018. Begin by computing Lemony​'s gross profit percentage for 2018. ​(Round your answer to the nearest tenth of a​ percent, X.X%.) Lemony's gross profit percentage for 2018 is %.

Answer 1

To find Lemony Company's gross profit percentage for 2018, we subtract the cost of goods sold from the total sales to get the gross profit and then divide it by the total sales. The calculation shows that the gross profit percentage for 2018 is 59.9%.

Step-by-step explanation:

To calculate the gross profit percentage, we first need to determine the gross profit in dollars. Gross profit is calculated by subtracting the cost of goods sold (COGS) from total sales. In this scenario, the total sales are $32,200 million and the cost of goods sold is $12,880 million. Therefore, the gross profit is calculated as follows:

Gross Profit = Total Sales - Cost of Goods Sold

Gross Profit = $32,200 million - $12,880 million

Gross Profit = $19,320 million

Next, to find the gross profit percentage, we divide the gross profit by the total sales and multiply by 100 to convert it to a percentage:

Gross Profit Percentage = (Gross Profit / Total Sales) × 100

Gross Profit Percentage = ($19,320 million / $32,200 million) × 100

Gross Profit Percentage = 59.9%

Therefore, Lemony's gross profit percentage for 2018 is 59.9%.