The Lumber Division
The Lumber Division of Home Innovations Company reported the following results for a recent year

$\begin{array}{ll}
\text {Sales } & \$ 8,000,000 \
\text {Expenses } & 6,250,000\\
\text { Total assets(1/1) } & 5,000.000\
\text { Total assets(12/31) } & 5,400.000
\end{array}$

Refer to the Lumber Division
What was the profit margin for the Lumber Division?
A)68%
B)35%
C)32%
D)22%

Question

The Lumber Division
The Lumber Division of Home Innovations Company reported the following results for a recent year

$\begin{array}{ll}
\text {Sales } & \$ 8,000,000  \
\text {Expenses } &  6,250,000\\
\text { Total assets(1/1) } & 5,000.000\
\text { Total assets(12/31) } & 5,400.000
\end{array}$

Refer to the Lumber Division
What was the profit margin for the Lumber Division?
A)68%
B)35%
C)32%
D)22%

Quizplus · Accepted Answer

Profit margin is calculated as (Net Income / Sales) * 100. Here, Net Income = Sales - Expenses = $8,000,000 - $6,250,000 = $1,750,000. Thus, Profit Margin = ($1,750,000 / $8,000,000) * 100 = 21.875%, which rounds to 22%.

The Lumber Division the Lumber Division of Home Innovations Company

The Lumber Division
the Lumber Division of Home Innovations Company