A company had net sales and cost of goods sold of $752,000 and $543,000, respectively. Its net income was $17,530. The company's gross margin ratio equals:
A) 18.9%
B) 24.5%
C) 27.8%
D) 34.7%
E) 35.2%

Question

Quizplus · Accepted Answer

Gross margin = Net sales - Cost of goods sold 
Gross margin ratio = (Gross margin / Net sales) x 100%

Gross margin = $752,000 - $543,000 = $209,000 
Gross margin ratio = ($209,000 / $752,000) x 100% = 27.8%

Therefore, the correct answer is (C) 27.8%.

A Company Had Net Sales and Cost of Goods Sold