Division D of Saunders Company has sales of $350,000, cost of goods sold of $120,000, operating expenses of $58,000, and invested assets of $150,000.
What is the profit margin for Division D?
A) 42.9%
B) 83.4%
C) 49.1%
D) 65.7%

Question

Quizplus · Accepted Answer

Profit Margin = Net Income / Sales
Net Income = Sales - Cost of Goods Sold - Operating Expenses
Net Income = $350,000 - $120,000 - $58,000 = $172,000
Profit Margin = $172,000 / $350,000 = 0.491 or 49.1%

Division D of Saunders Company Has Sales of $350,000, Cost