Financial information is presented below: Operating expenses $ 28,000
Sales returns and allowances 7,000
Sales discounts 3,000
Sales revenue 150,000
Cost of goods sold 98,000
The profit margin would be
A).28.
B).09.
C).30.
D).10.

Question

Quizplus · Accepted Answer

Profit margin is calculated as (Net Income / Sales Revenue). Net Income = Sales Revenue - Cost of Goods Sold - Operating Expenses - Sales Returns and Allowances - Sales Discounts = $150,000 - $98,000 - $28,000 - $7,000 - $3,000 = $14,000. Profit Margin = $14,000 / $150,000 = 0.0933, approximately 0.10 or 10%.

Financial Information Is Presented Below: Operating Expenses $ 28,000