Question

calculate the gross margin in dollars and percentage for the home department if net sales = 140,000, billed cost of merchandise = $84,000, cost discount = 7.5%, shipping charges = 240

Answer 1

Gross Margin (dollars) = $62,060

Gross Margin % = 44.33 %

Step-by-step explanation:

Calculation of Gross Margin

Net Sales $140,000

Less Cost of Sales

Opening Stock $0

Add Purchase of Merchandise $84,000

Less Trade Discount ($84,000 × 7.5%) ($6,300)

Add shipping charges $240

Cost of Goods Sold ($77,940)

Gross Profit $62,060

Gross Margin %

Gross Margin % = Gross Profit / Net Sales × 100

= $62,060 / $140,000 × 100

= 44.33 %