If a company has net sales of $500,000 and cost of goods sold of $350,000, the gross profit margin is
A)15%.
B)30%.
C)70%.
D)100%.

Question

Quizplus · Accepted Answer

To find the gross profit margin, we need to subtract the cost of goods sold from the net sales and then divide by net sales.

Gross profit margin = (Net sales - Cost of goods sold)/Net sales
Gross profit margin = ($500,000 - $350,000)/$500,000
Gross profit margin = $150,000/$500,000
Gross profit margin = 0.3 or 30%

Therefore, the answer is B, 30%.

If a Company Has Net Sales of $500,000 and Cost