Figure 12-1. Dempsey Company provided the following information for last year:
Refer to Figure 12-1.Calculate Dempsey's margin for last year,rounding to two decimal places.
A)2.0
B)0.26
C)0.38
D)0.50
E)0.35

Question

Figure 12-1. Dempsey Company provided the following information for last year:
 Refer to Figure 12-1.Calculate Dempsey's margin for last year,rounding to two decimal places.
A)2.0 
B)0.26 
C)0.38 
D)0.50 
E)0.35

Quizplus · Accepted Answer

Margin is calculated as net income divided by sales. Using the provided information, Dempsey's net income was $45,000 ($100,000 - $55,000) and their sales were $120,000. Thus, the margin is $45,000/$120,000 = 0.375, which rounds to 0.38. Therefore, the correct answer is C.