Question

For the most recent period, John Company recorded sales of 26000 and Cost of Goods Sold of 7000. What is John Company's gross margin for the most recent period?

a) $19,000
b) $18,000
c) $26,000
d) $7,000

Answer 1

John Company's gross margin for the most recent period is calculated by subtracting the Cost of Goods Sold ($7,000) from the sales ($26,000), resulting in a gross margin of $19,000. The correct option is: a) $19,000.

Step-by-step explanation:

To calculate John Company's gross margin for the most recent period, we subtract the Cost of Goods Sold (COGS) from the sales. In this case, John Company recorded sales of $26,000 and a COGS of $7,000.

The formula to calculate gross margin is:

Gross Margin = Sales - Cost of Goods Sold

Therefore:

Gross Margin = $26,000 - $7,000 = $19,000.

So, the correct answer to the question is a) $19,000.