advertising of $500. Calculate the after tax net profit percentage for Country Homes.
A)40 percent
B)26.3 percent
C)9.6 percent
D)60.2 percent
E)7.3 percent

Question

Quizplus · Accepted Answer

Operating Expenses = $3000 rent + $27,000 salaries + $1,200 utilities +$500 advertising = $31,700 OE/NS = OE% $31700/$120,500 = 26.3%Gross Margin = Net Sales - Cost of goods sold = $120,500 - $72,300 = $48,200GM $/NS = GM% 48200/120500 = 40%Net Operating Profit before tax = Gross Margin $48,200 - $31,700 = $16,500Net profit margin = Net profit after tax/Net sales = $16500 - $7680 taxes = $8820/$120,500 net sales = .0732 or 7.3%

Advertising of $500