Question

Calculate the amount of gross margin given the following information:

Sales Revenues $150,000
Cost of Goods Sold $90,000
Sales Discounts $3,000
Selling Expenses $25,000
Sales Returns and Allowances $5,000
Administrative Expenses $15,000

Answer 1

The gross margin can be calculated by subtracting the Cost of Goods Sold and Sales Returns and Allowances from the Sales Revenues. In this case, the gross margin is $55,000.

Step-by-step explanation:

The gross margin can be calculated by subtracting the Cost of Goods Sold (COGS) and Sales Returns and Allowances from the Sales Revenues. Gross Margin = Sales Revenues - (COGS + Sales Returns and Allowances)

In this case, the COGS is $90,000 and the Sales Returns and Allowances is $5,000. The Sales Revenues can be determined by subtracting the Sales Discounts ($3,000) from the given Sales Revenues ($150,000).

Gross Margin = $150,000 - ($90,000 + $5,000) = $55,000