Question

Net sales Cost of goods sold $220,000 $160,000 140,800 102,400 48,700 21,400 Operating expenses Income tax expense 14,000 9,0

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Answer #1

Gross profit rate = Gross Profit/Sales

Profit Margin = Net income/Sales

2017 2016
Gross profit rate

(220,000-140800)/220,000

= 36%

(160,000-102400)/160000

= 36%

Profit Margin

(16500/220,000)

= 7.5%

(27200/160,000)

= 17%

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