A company has net sales and cost of goods sold of $825,000 and $547,000, respectively. Its net income is $98,500. The company's gross margin and total other expenses are ________ and ___________, respectively.
A) $209,000; $191,470
B) $278,000; $179,500
C) $278,000; $98,500
D) $179,500; $98,500
E) $645,500; $179,500

Question

Quizplus · Accepted Answer

Gross margin is calculated as net sales minus cost of goods sold, which is $825,000 - $547,000 = $278,000. Total other expenses are calculated by subtracting the gross margin from net sales and then subtracting net income, which gives us $825,000 - $278,000 - $98,500 = $448,500. However, the correct calculation for total other expenses should be gross margin minus net income, which is $278,000 - $98,500 = $179,500.

A Company Has Net Sales and Cost of Goods Sold