Consider the following information regarding the operations of Owen Glass Company's South division for last year:...

Consider the following information regarding the operations of Owen Glass Company's South division for last year:


Sales	$	7,000,000
Cost of goods sold		3,200,000
Allocated corporate overhead		250,000
Administrative costs		820,000
General costs		500,000
Tax rate		45	%

What is the division's gross margin percentage?

Expert Solution

The Gross Margin Ratio, also known as the gross profit margin ratio, is a profitability ratio that compares the gross margin of a company to its revenue. It shows how much profit a company makes after paying off its Cost of Goods Sold (COGS)

To make the margin a percentage, multiply the result by 100

Gross Margin Ratio = (Revenue – COGS) / Revenue

Gross profit =(Revenue – COGS)

Colby Messinger answered 2 years ago

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