Asked by Rainn Cline on Jun 24, 2024
Verified
Mormino Corporation's income statement appears below: 
The company's gross margin percentage is closest to:
A) 1888.9%
B) 5.3%
C) 41.1%
D) 69.9%
Gross Margin Percentage
A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, demonstrating the efficiency of a company in managing its production costs relative to sales.
Income Statement
A financial document that shows a company's revenues and expenses over a specified period, illustrating how the net revenue of the company is transformed into net income.
- Figure out and grasp the percentages related to net profit margins and how they affect profitability.
Verified Answer
MI
Misbah IntisarJun 24, 2024
Final Answer :
C
Explanation :
Gross margin percentage is calculated by dividing gross profit by total revenue and multiplying by 100.
Gross profit = Revenue - Cost of goods sold
= $134,000 - $79,000
= $55,000
Therefore, gross margin percentage = (55,000/134,000) x 100
= 40.92%
Rounding up, the closest answer choice is C) 41.1%.
Gross profit = Revenue - Cost of goods sold
= $134,000 - $79,000
= $55,000
Therefore, gross margin percentage = (55,000/134,000) x 100
= 40.92%
Rounding up, the closest answer choice is C) 41.1%.
Explanation :
Gross margin percentage = Gross margin ÷ Sales
= $510,000 ÷ $1,240,000 = 41.1% (rounded)
= $510,000 ÷ $1,240,000 = 41.1% (rounded)
Learning Objectives
- Figure out and grasp the percentages related to net profit margins and how they affect profitability.