A company has a gross margin ratio of 40%.Cost of Goods Sold equals $360,000.Its selling,general and administrative expenses total $87,500.Its sales for the period equals
A)$240,000.
B)$87,500.
C)$152,500.
D)$360,000.
E)$600,000.

Question

Quizplus · Accepted Answer

The gross margin ratio is calculated as (Sales - Cost of Goods Sold) / Sales. Given a gross margin ratio of 40% and a Cost of Goods Sold of $360,000, we can set up the equation 0.40 = (Sales - 360,000) / Sales. Solving for Sales gives us $600,000.

A Company Has a Gross Margin Ratio of 40