Upseedaisees is popular loungewear that prides itself on its versatility.Last year,its net sales were $1,450,000 with cost of goods of $353,000.Taxes totalled $61,650.The company's expenses totalled $960,000.Calculate the company's net profit margin.
A) 5.2 percent
B) 24.3 percent
C) 8.8 percent
D) 12.5 percent
E) 90.5 percent

Question

Quizplus · Accepted Answer

Gross margin = Net sales - Cost of goods sold = $1,450,000 - $353,000 = $1,097,000. Net profit before tax = Gross margin - Expenses = $1,097,000 - $960,000 = $137,000. Net profit after tax = Net profit before tax - Taxes = $137,000 - $61,650 = $75,350. Net profit margin = Net profit after tax/Net sales = $75,350/$1,450,000 = 5.2 percent.

Upseedaisees Is Popular Loungewear That Prides Itself on Its Versatility