In 2014 Snout and Smith,Inc.had a gross profit of $27,000 on sales of $110,000.S & S's operating expenses for 2014 were $13,000,and its net profit margin was .0585.Snout and Smith had no interest expense in 2014.Using this information,what was S & S's operating profit margin for 2014?
A)0.245
B)0.118
C)0.127
D)0.157

Question

Quizplus · Accepted Answer

Operating profit margin = (Gross profit - Operating expenses) / Sales
Operating profit margin = (27,000 - 13,000) / 110,000
Operating profit margin = 14,000 / 110,000
Operating profit margin = 0.127 or 12.7% 
Therefore, the best choice is C.