Question

A company has a net sales of 847000 and cost of goods sold of 561500. Its net income is 101200. The company's gross margin and operating expenses, respectively are

Answer 1

Answer:

Gross profit margin =  33.7%

Operating expenses = $184,300

Explanation:

The gross margin is the percentage of sales value is earned as gross profit.

Gross profit   =  Sales - cost of goods sold

                           =847,000 -561,500 =$285,500

Gross profit margin = (Sales - cost of goods sold)/sales ×  100

                                =  (847,000 -561,500/847,000)  ×  100

                                 =  33.7%

Operating expenses represent the amount of indirect cost expenditures which cannot be traced to the cost of the goods sold . This include administrative expenses like rent, insurance e.t.c

Operating expense = Gross profit - Net income

                                = (847,000 -561,500)   -  101,200

                                = 184,300