Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000; Rogue's operating profit margin is equal to
A) 25.67%.
B) 35.67%.
C) 36.67%.
D) 50.00%.

Question

Quizplus · Accepted Answer

Operating profit margin is calculated by dividing operating profit by sales. Operating profit is calculated as sales minus cost of goods sold, depreciation expense, administrative expenses, interest expense, and marketing expenses. 
Operating profit = Sales - (Cost of Goods Sold + Depreciation Expense + Administrative Expenses + Interest Expense + Marketing Expenses) 
= $3,000,000 - ($1,500,000 + $170,000 + $150,000 + $30,000 + $80,000) 
= $1,070,000

So, Operating profit margin = Operating profit / Sales = $1,070,000 / $3,000,000 = 0.3567 or 35.67%

Therefore, the correct answer is C.

Rogue Industries Reported the Following Items for the Current Year