Question

In: Finance

Calculate the gross margin in dollars and percentage for thehome department if:Net sales =...

Calculate the gross margin in dollars and percentage for the home department if:

Net sales = 140,000

Billed cost of merchandise = $84,000

Cost discount = 7.5%

Shipping charges = $240


Solutions

Expert Solution

Gross Margin is computed as follows:

= Net sales - (Billed cost of merchandise) x (1 - cost discount) - shipping charges

= $ 140,000 - $ 84,000 x 0.925 - $ 240

= $ 62,060

% is computed as follows:

= Gross Margin / Sales

= $ 62,060 / $ 140,000

= 44.33% Approximately


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