Mega Skateboard Supplier had net sales of $2.8 million, its cost of goods sold was $1.6 million, and its net income was $0.9 million. Its gross margin ratio equals:
A) 175%.
B) 32%.
C) 43%.
D) 57%.
E) 56%.

Question

Quizplus · Accepted Answer

Gross Margin Ratio = (Net Sales - Cost of Goods Sold) / Net Sales 
= ($2.8 million - $1.6 million) / $2.8 million 
= $1.2 million / $2.8 million 
= 0.4286 or 42.86% 
Therefore, the closest answer choice is C, which is 43%.

Mega Skateboard Supplier Had Net Sales of $2