Ence Sales, Inc., a merchandising company, reported sales of 6,400 units in April at a selling price of $684 per unit. Cost of goods sold, which is a variable cost, was $455 per unit. Variable selling expenses were $30 per unit and variable administrative expenses were $40 per unit. The total fixed selling expenses were $156,800 and the total administrative expenses were $260,400. The gross margin for April was:
A)$1,465,600
B)$3,960,400
C)$1,017,600
D)$600,400

Question

Quizplus · Accepted Answer

The gross margin is calculated as total sales minus the cost of goods sold. Total sales = 6,400 units * $684 = $4,377,600. Total cost of goods sold = 6,400 units * $455 = $2,912,000. Gross margin = $4,377,600 - $2,912,000 = $1,465,600.