Question

A company's net sales were $678,400, its cost of goods sold was $218,810, and its net income was $35,550. Its gross margin ratio equals:

Answer 1

The answer is 67.75 percent

Step-by-step explanation:

Gross profit margin is a measure of profitability.

Gross margin ratio = (gross profit ÷ net revenue/sales) x 100 percent.

Gross profit = net sales - cost of sales

Net sales - $678,400

Cost of sales - $218,810

Gross profit = $678,400- $218,810

= $459,590

Now gross margin ratio:

($459,590/$678,400) x 100 percent

= 67.75 percent