Question

Hazard Corporation had beginning inventory of $ 28 comma 000 and ending inventory of $ 36 comma 000. Its net sales were $ 153 comma 000 and net purchases were $ 75 comma 000. Cost of goods sold for the period was $ 67 comma 000. What is Hazard​'s gross profit percentage​ (rounded to the nearest whole​ percentage)

Answer 1

56.2%

Step-by-step explanation:

gross profit percentage = (total revenues - cost of goods sold) / total revenues

• total revenue = $153,000
• cost of goods sold = $67,000

gross profit percentage = ($153,000 - $67,000) / $153,000 = $86,000 / $153,000 = 0.562 x 100 = 56.2%

There is no measurement for a good gross profit margin since it varies depending on the industry and different cost structures, but there is a general industry reference for net profits margins: 5% low, 10% average and 20% high (very good).