Question

A company has a net sales of 847000 and cost of goods sold of 561500. Its net income is 101200. The company's gross margin and operating expenses, respectively are

Answer 1

Gross profit margin = 33.7%

Operating expenses = $184,300

Step-by-step explanation:

The gross margin is the percentage of sales value is earned as gross profit.

Gross profit = Sales - cost of goods sold

=847,000 -561,500 =$285,500

Gross profit margin = (Sales - cost of goods sold)/sales × 100

= (847,000 -561,500/847,000) × 100

= 33.7%

Operating expenses represent the amount of indirect cost expenditures which cannot be traced to the cost of the goods sold . This include administrative expenses like rent, insurance e.t.c

Operating expense = Gross profit - Net income

= (847,000 -561,500) - 101,200

= 184,300