Question

Last month, Koreyâs Comics had $4,350 in net sales with a gross profit of $3,320 and a net income of $1,850. Calculate Koreyâs gross profit margin.

a. 42.5%
b. 55.7%
c. 76.3%
d. 179.5%
Please select the best answer from the choices provided A B C D

Answer 1

A. 42.5%

edge ⬇️

Answer 2

GPM = 76.3%

Explanation:

The formula for gross profit margin is:

`GPM = (Net\ Sales- COGS)/(Net\ Sales)`

GPM: Gross Profit Margin

COGS: Cost Of Goods Sold

Also:

`Gross\ Profit = Net\ Sales - COGS`

Replacing with the given information:

`GPM = (3,320)/(4,350) = 0.763 = 76.3\%`