Mormino Corporation's income statement appears below: The company's gross margin percentage is closest to:
A)1888.9%
B)5.3%
C)41.1%
D)69.9%

Question

Mormino Corporation's income statement appears below:  The company's gross margin percentage is closest to:
A)1888.9% 
B)5.3% 
C)41.1% 
D)69.9%

Quizplus · Accepted Answer

Gross margin percentage is calculated by dividing gross profit by total revenue and multiplying by 100. 
Gross profit = Revenue - Cost of goods sold 
= $134,000 - $79,000 
= $55,000

Therefore, gross margin percentage = (55,000/134,000) x 100 
= 40.92% 
Rounding up, the closest answer choice is C) 41.1%. Gross margin percentage = Gross margin ÷ Sales
= $510,000 ÷ $1,240,000 = 41.1% (rounded)

Mormino Corporation's Income Statement Appears Below: the Company's Gross