If a business's net sales are $20,000 while cost of goods sold totals $6,000, its gross margin is $14,000 or 70 percent of sales.

Question

Quizplus · Accepted Answer

Gross margin is calculated by subtracting the cost of goods sold from net sales. In this case, $20,000 (net sales) - $6,000 (cost of goods sold) = $14,000. To find the percentage, divide the gross margin ($14,000) by net sales ($20,000) and multiply by 100, resulting in 70%.

If a Business's Net Sales Are $20,000 While Cost of Goods