Question

Last year, Sally had a gross profit margin of 68% in her hair salon. Her gross profit was $32,508.63. How much did Sally make in net sales last year?

a.
$16,398.06
b.
$22,105.87
c.
$35,610.25
d.
$47,806.81

Answer 1

$47,806.81 (D)

Explanation:

Answer 2

A business' profit margin is the ratio between the gross profit and net sales. It's ideal for a business to have a profit margin closest to 1. For the given situation, Sally has a gross profit of $32, 508.63 and a profit margin of 68% or 0.68. Thus, we have


`0.68 = (32508.63)/(sales)`

`sales = (32508.63)/(0.68) = 47806.81`

Therefore, the net sales earned by Sally's hair salon is $47, 806.81.

Answer: D. $ 47, 806.81