Final answer:
To calculate the gross profit margin percentage for Arabella's contract, we need the revenue and COGS, which is not provided. The calculation involves subtracting COGS from revenue to obtain gross profit, then dividing by revenue and multiplying by 100.
Step-by-step explanation:
The question pertains to calculating the gross profit margin percentage, which is a measure of a company's financial health and efficiency at generating profit. The gross profit margin is calculated by taking the differece between revenue and cost of goods sold (COGS) and dividing it by the revenue, then multiplying by 100 to get a percentage.
However, the provided excerpts do not clearly state the revenue or COGS for Arabella's specific order. If we assume the revenue is the $1 million sales revenue and the costs are the sum of labor, capital, and materials from the given firm's accounting profit example, then we calculate the gross profit and then the gross profit margin percentage as follows:
- Total costs (COGS) = Labor + Capital + Materials)
- Gross Profit = Revenue - COGS
- Gross Profit Margin Percentage = (Gross Profit / Revenue) x 100%
The accounting profit calculation from Chapter 7 (Accounting profit = total revenues minus explicit costs) would yield a gross profit but without specific values for Arabella's contract, we cannot provide the gross profit margin percentage.