Barehugs is popular loungewear that prides itself on its versatility.Last year,its net sales were $1,750,000 with cost of goods of $390,000.Taxes totaled $61,650.The company's expenses totaled $960,000.Calculate the company's net after tax profit margin percentage.

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Quizplus · Accepted Answer

Gross Margin = Net Sales Cost of goods sold = $1,750,000 - $390,000 = $1,360,000.Net Profit before tax= Gross Margin Expenses = $1,360,000 - $960,000 = $400,000.Net Profit after tax = Net Profit before Tax = $400,000 - $61,650 = $338,350Net profit margin = Net profit after tax/Net sales = $338,350/$1,750,000 = 19.3 percent

Barehugs Is Popular Loungewear That Prides Itself on Its Versatility