Question

The quarterly operating statement for a firm gives the following information: Number of pieces manufactured: 100 Number of pieces sold: 100 Total cost of goods sold: $800 Average cost of single piece: $5 Net sales: $1,000 It can be inferred that the firm's gross margin is _____. Group of answer choices

A. $92
B. $2
C. $1800
D. $200
E. $1818

Answer 1

D, $200

Step-by-step explanation:

The gross margin of a company is the difference between its net sales and its cost of goods sold.

Simply put, gross margin is the sales revenue a company retains after it has incurred direct costs in the production of its goods.

By the above definition, we have groos margin to be

Net sales - Total cost of goods sold

i.e: $1,000 - $800 = $200.

Cheers.