Calculate: Profit Margin and Gross Profit Rate

Question

1. Durbin Corporation reported net sales of $259,800, cost of goods sold of $121,800, operating expenses of $46,950, net income of $32,140, beginning total assets of $511,400, and ending total assets of $638,700.

Calculate profit margin and gross profit rate. (Round answers to 0 decimal places, e.g. 10%.)

2. Calculate the profit margin and the gross profit rate. (Round answers to 1 decimal place, e.g. 15.2%)

Net Income: $35,203
Net Sales:$945,880
Gross Profit: $288,579

Answer 1

1.

Sales  - - $259,800

Less CGS -- 121.800

Gross margin . . 138,000

 

Gross margin rate is 138,000 / 259,800 = 53%

 

2.

Gross profit rate: 288,579 / 945,880 = 30.5%

 

I don't understand why you are asking for these simple calculations.