Country Homes is a store for people who collect country arts and crafts and use them to decorate their homes. Last year, its net sales totaled $120,500. The cost value of the items it sold was $72,300. Taxes for the year were $7,680. The only expenses that the operation had were (1) rent for $3000, (2) salaries to the owner and one part-time assistant for $27,000, (3) utilities at $1,200, and (4) advertising of $500. Calculate the gross margin percentage for Country Homes.

Question

Quizplus · Accepted Answer

Gross Margin = Net Sales - Cost of goods sold = $120,500 - $72,300 = $48,200.
Gross margin/Net sales = Gross margin percent. 48,200/120,500 = 0.4 * 100 = 40%

Country Homes Is a Store for People Who Collect Country