Question

Carrier Lennox Trane York Sales $ 150,000 $ 550,000 $ 38,700 $ 255,700 Sales discounts 5,000 17,500 600 4,800 Sales returns and allowances 20,000 6,000 5,100 900 Cost of goods sold 79,750 329,589 24,453 126,500 Compute net sales, gross profit, and the gross margin ratio for each of the four separate companies. (Round your gross margin ratio to 1 decimal place; i.e.; 0.2367 should be entered as 23.7%.)

Answer 1

Answer:

The Net sales of Carrier, Lennox, Trane, York is $125,000, $526,500, $33,000 , and $250,000 respectively

The gross profit of Carrier, Lennox, Trane, York is $45,250,  $196,911,  $8,547, and $123,500 respectively

The gross margin ratio of Carrier, Lennox, Trane, York is 36.2%,  37.4%, 37.4%, and 49.4% respectively.

Explanation:

The computation of the net sales is shown below:

= Sales - sales discounts - sales  returns and allowances

For Carrier, the net sales would be

= $150,000 - $5,000 - $20,000

= $125,000

For Lennox, the net sales would be

= $550,000 - $17,500 - $6,000

= $526,500

For Trane, the net sales would be

= $38,700 - $600 - $5,100

= $33,000

For York, the net sales would be

= $255,700 - $4,800 - $900

= $250,000

The computation of the gross profit is shown below:

= Net sales - cost of goods sold

For Carrier, the gross profit would be

= $125,000 - $79,750

= $45,250

For Lennox, the gross profit would be

= $526,500 - $329,589

= $196,911

For Trane, the gross profit would be

= $33,000 - $24,453

= $8,547

For York, the gross profit would be

= $250,000 - $126,500

= $123,500

The computation of the gross margin is shown below:

= (Gross margin ÷ net sales) × 100

For Carrier, the gross margin ratio would be

= ($45,250 ÷ $125,000) × 100

= 36.2%

For Lennox, the gross margin ratio would be

= ($196,911 ÷ $526,500) × 100

= 37.4%

For Trane, the gross margin ratio would be

= ($8,547 ÷ $33,000) × 100

= 25.9%

For York, the gross margin ratio would be

= ($123,500 ÷ $250,000) × 100

= 49.4%