If gross profit is $540,000,interest expense is $200,000,sales is $1,800,000 and total assets are $5,400,000,calculate the gross profit margin.
A) 6.3%.
B) 18.9%.
C) 30%.
D) 10%.

Question

Quizplus · Accepted Answer

Gross profit margin is calculated by dividing gross profit by sales and multiplying by 100. 
Gross profit margin = (gross profit / sales) x 100%
Gross profit margin = (540,000 / 1,800,000) x 100%
Gross profit margin = 30%

If Gross Profit Is $540,000,interest Expense Is $200,000,sales Is $1,800,000