PJ Corp. reported the following income statement results:
|Sales returns & allowances||$7,400|
|Gain on sale of equipment||$30,000|
Calculate the gross profit margin.
Gross Profit Margin:
The gross profit of a company can be calculated in terms of ratio or dollar value. A higher gross margin allows a company to spend more on sales and promotional expenses which ultimately increase the profits.
Answer and Explanation: 1
The calculation for gross profit margin is 38.31%.
The calculation is shown below.
Net sales = Sales - Sales return & allowances
Net sales =...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 5 / Lesson 17
Learn how gross profit is calculated. Explore how to calculate gross profit margin, the definition of revenue, and the difference between gross and net profit.