At the End of 2014, Doran Corporation Reported Net Income

question 88

Essay

At the end of 2014, Doran Corporation reported net income of $70,000, gross sales revenue of $1,525,000, and sales returns of $125,000.
Required:
Calculate the profit margin ratio.

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Definitions:

Raw Materials Purchase

The acquisition of basic materials needed for the production of goods, a critical input in the manufacturing process.

Raw Materials Inventory

The stock of basic materials that are required to manufacture goods, held by a company awaiting to be used in the production process.

Raw Materials Purchases

Refers to the total cost of all raw materials bought by a company over a specific period for use in its production process.

Standard Cost System

A cost accounting system that uses standard costs for materials, labor, and overhead to control and reduce costs.