Question

Using the data below, compute Dino’s return on sales ratio for the month of January. Net Sales $13,000 Cost of goods sold 5,000 Operating expenses 3,500 Other income 1,000 Income tax expense 1,700 Round answer to the nearest whole percentage.

Answer 1

34.62%

Step-by-step explanation:

The return of on sales ratio is also known as operating profit margin. This is the ratio of the operating profit to the net sales.

Given;

Net Sales = $13,000

Cost of goods sold = $5,000

Operating expenses = $3,500

Other income = $1,000

Income tax expense = $1,700

The operating profit margin does not consider other income and income tax expenses.

Operating profit = $13,000 - $5,000 - $3,500

= $4,500

Return on sales = operating profit/net sales = $4,500/$13,000

= 34.62%