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Gilbert's Hydraulics Has Provided You with the Following Selected Information

Question 121

Multiple Choice

Gilbert's Hydraulics has provided you with the following selected information from 2020 and 2021: 20212020 Sales $$740,000785,000 Sales returns and allowances 55,20052,000 Cost of goods sold 358,000305,000 Operating expenses 285,000255,000 Profit 86,800128,000\begin{array} { l r r } &2021 & 2020\\\hline\text { Sales } & { \$ } & { \$740,000 } \\& 785,000 & \\\text { Sales returns and allowances } & 55,200 & 52,000 \\\text { Cost of goods sold } & 358,000 & 305,000 \\\text { Operating expenses } & 285,000 & 255,000 \\\text { Profit } & 86,800 & 128,000\end{array} Which of the following best interprets Gilbert's profit margin?


A) Profit margin has weakened compared to prior year, decreasing from 45.6% to 41.2%.
B) Profit margin has weakened compared to prior year, decreasing from 18.6% to 11.9%.
C) Profit margin has weakened compared to prior year, decreasing from 17.3% to 11.1%.
D) Profit margin has weakened compared to prior year, decreasing from 55.7% to 50.9%.

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