Answer:
Windsor, Inc. Sheridan Company
Sales revenue $82,000 <u>$96,200</u>
Sales returns and allowances $6000 $4,200
Net sales $76,000 $92,000
Cost of goods sold $52,440 <u>$58,880</u>
Gross profit $23,560 $33,120
Operating expenses $13,680 <u>$20,240</u>
Net income <u>$9,880</u> $12,880
Profit Margin 13% 14%
Gross Profit Rate 31% 36%
Explanation:
As we Know:
Windsor, Inc.
Net Income = Gross profit - Operating Expenses = $23,560 - $13,680 = $9,880
Profit Margin = ( Net Profit / Net Sales ) x 100 = ( $9,880 / $76,000 ) x 100 = 13%
Gross Profit rate = ( Gross profit / Net Sales ) x 100 = ( $23,560 / $76,000 ) x 100 = 31%
Sheridan Company
Net Sales = Gross Sales - Sales returns and allowances
$92000 = Gross Sales - $4,200
Gross Sales = $92,000 + $4,200 = $96,200
Gross profit = Net sales - Cost of Goods Sold
$33,120 = $92,000 - COGS
COGS = $92,000 - $33,120
COGS = $58,880
Net income = Gross profit - Operating Expenses
$12,880 = 33,120 - Operating Expenses
Operating Expenses = $12,880 - $33,120 = $20,240
Profit Margin = ( Net Profit / Net Sales ) x 100 = ( $12,880 / $92,000 ) x 100 = 14%
Gross Profit rate = ( Gross profit / Net Sales ) x 100 = ( $33,120 / $92,000 ) x 100 = 36%
