If a company has a gross profit of $300,000 and total sales of $1,000,000, what

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Question: If a company has a gross profit of $300,000 and total sales of $1,000,000, what is the gross profit margin?

Options:

Correct Answer: 25%

Solution:

Gross Profit Margin = (Gross Profit / Total Sales) x 100 = ($300,000 / $1,000,000) x 100 = 30%.

If a company has a gross profit of $300,000 and total sales of $1,000,000, what is the gross profit margin?

If a company has a gross profit of $300,000 and total sales of $1,000,000, what is the gross profit margin?

Step 1: Identify the gross profit, which is $300,000.
Step 2: Identify the total sales, which is $1,000,000.
Step 3: Use the formula for gross profit margin: Gross Profit Margin = (Gross Profit / Total Sales) x 100.
Step 4: Plug in the numbers: Gross Profit Margin = ($300,000 / $1,000,000) x 100.
Step 5: Calculate the division: $300,000 divided by $1,000,000 equals 0.3.
Step 6: Multiply 0.3 by 100 to get the percentage: 0.3 x 100 equals 30%.
Step 7: Conclude that the gross profit margin is 30%.

Gross Profit Margin – The gross profit margin is a financial metric that shows the percentage of revenue that exceeds the cost of goods sold (COGS). It is calculated by dividing gross profit by total sales and multiplying by 100.