US CMA Part 2 · Chapter 2 · Question 1 of 15
Mercer Apparel had net sales of $2,400,000 and cost of goods sold of $1,560,000. What is its gross profit margin?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) 35.0%
Explanation
Gross profit = $2,400,000 - $1,560,000 = $840,000. Gross profit margin = gross profit / net sales = $840,000 / $2,400,000 = 35.0%. 65.0% is the cost of goods sold percentage, and 53.8% is a markup on cost rather than a margin on sales.
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