Answer:
1. Gross margin percentage:
For Denver and the Reno is 53% and 27%
2. Return on sales ratio:
For Denver and the Reno is 18% and 10%
Explanation:
1. The formula to compute the gross margin percentage is shown below:
Gross margin percentage = (Gross margin) ÷ (Net sales) × 100
For Denver = ($17,760 ÷ $33,200) × 100 = 53%
For Reno = ($23,850 ÷ $86,900) × 100 = 27%
2. The formula to compute the return-on-sales ratios is shown below:
Return-on-sales ratio = (Net income) ÷ (Net sales) × 100
For Denver = ($6,000 ÷ $33,200) × 100 = 18%
For Reno = ($8,502 ÷ $86,900) × 100 = 10%
