Question

A company has net sales of $788,500 and cost of goods sold of $569,500. Its net income is $26,280. The company's gross margin

and operating expenses, respectively, are:

Answer 1

The company's gross margin is $219,000, calculated by subtracting the cost of goods sold from the net sales. The operating expenses are $192,720, found by subtracting the net income from the gross margin.

Step-by-step explanation:

To calculate the company's gross margin, we subtract the cost of goods sold from the net sales. The cost of goods sold (COGS) is $569,500, and the net sales are $788,500. The gross margin is therefore $788,500 - $569,500, which equals $219,000.

Next, to find the operating expenses, we need to consider that the gross margin minus operating expenses gives us the net income before taxes. The company's net income is reported as $26,280. Therefore, the operating expenses are the gross margin of $219,000 minus the net income of $26,280, which equals $192,720.

In conclusion, the company's gross margin is $219,000, and its operating expenses are $192,720.

Answer 2

Gross margin = $219,000

Operating income = $198,720

Explanation:

The computation of gross margin

and operating expenses is shown below:-

Gross margin = Net sales - Cost of goods sold

= $788,500 - $569,500

= $219,000

Net income = Gross margin - Operating expenses

$26,280 = $219,000 - Operating expenses

Operating expenses = $219,000 - $26,280

= $198,720

Therefore the gross margin is $219,000 and operating income is $198,720

We simply applied the above formulas