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3 April, 06:19

A company has a net sales of 847000 and cost of goods sold of 561500. Its net income is 101200. The company's gross margin and operating expenses, respectively are

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  1. 3 April, 06:34
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    Gross profit margin = 33.7%

    Operating expenses = $184,300

    Explanation:

    The gross margin is the percentage of sales value is earned as gross profit.

    Gross profit = Sales - cost of goods sold

    =847,000 - 561,500 = $285,500

    Gross profit margin = (Sales - cost of goods sold) / sales * 100

    = (847,000 - 561,500/847,000) * 100

    = 33.7%

    Operating expenses represent the amount of indirect cost expenditures which cannot be traced to the cost of the goods sold. This include administrative expenses like rent, insurance e. t. c

    Operating expense = Gross profit - Net income

    = (847,000 - 561,500) - 101,200

    = 184,300
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