At year-end, Hercules, Inc. had Sales Revenue was $1,235,000. Its Cost of Goods Sold was 45% of Sales Revenue. Operating expenses for the year included $345,000 of Selling Expense and $142,000 of General and Administrative Expenses. Hercules, Inc. also had balances in Work-In-Process Inventory of $56,000, Finished Goods Inventory of $69,000, and Prepaid Expenses of $13,000 at year-end. What was the gross margin for Hercules, Inc. at year-end?

Question

Quizplus · Accepted Answer

Gross Margin = Sales Revenue - Cost of Goods Sold = $1,235,000 - ($1,235,000 x 45%) = $679,250 or $1,235,000 x (100% - 45%) = $679,250.

At Year-End, Hercules, Inc