Final answer:
The gross margin ratio for the company can be calculated by subtracting the cost of goods sold from the net sales and then dividing the result by the net sales. In this case, the gross margin ratio is 66.6%.
Step-by-step explanation:
The gross margin ratio is calculated by subtracting the cost of goods sold from the net sales, and then dividing the result by the net sales. It is a measure of a company's financial health, indicating the percentage of sales revenue retained after incurring the direct costs associated with the production of the goods sold.
For the company in question:
- Net sales: $738,800
- Cost of goods sold: $246,020
- Gross profit (Net sales - Cost of goods sold): $738,800 - $246,020 = $492,780
- Gross margin ratio (Gross profit / Net sales): $492,780 / $738,800 = 0.667 or 66.7%
- The gross margin ratio for the company is 66.7%.