Question

se the following information for Jett Co. to answer the following question: 2015 2014 Sales 1,200 1,000 COGS 850 700 Operating Expenses 200 200 Income Taxes 30 35 Jett Co.'s gross profit, operating profit and net profit margins for 2015 are: A. 50.0%, 32.5%, 22.5% respectively. B. 29.2%, 12.5%, 10.0%, respectively. C. 27.0%, 11.0%, 10.5%, respectively. D. 21.5%, 17.5%, 12.0%, respectively.

Answer 1

B. 29.2%, 12.5%, 10.0%

Step-by-step explanation:

Gross Profit = Sales - Cost of goods sold / Sales

Gross Profit = $1,200 - $850 / $1,200

Gross Profit = $350 / $1,200

Gross Profit = 0.2917

Gross Profit = 29.17%

Operating profit = Sales - Cost of goods sold - Operating Expenses / Sales

Operating profit = $1,200 - $850 - $200 / $1,200

Operating profit = $150 / $1,200

Operating profit = 0.125

Operating profit = 12.5%

Net profit margin = Sales - Cost of goods sold - Income Taxes / Sales

Net profit margin= $1,200 - $850 - $200 - $30 / $1,200

Net profit margin $120 / $1,200

Net profit margin= 0.1

Net profit margin= 10%