A Firm Has Net Sales of $65,000, Operating Expenses of $21,300

question 95

Multiple Choice

A firm has net sales of $65,000, operating expenses of $21,300, depreciation of $5,000, cost of goods sold of $36,500, and interest expense of $4,500. What is the operating margin?

• A)−2.8%
• B)2.6%
• C)3.4%
• D)9.2%
• E)10.3%

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Definitions:

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not been sold yet.

Direct Material Requirements

The specific materials and quantities needed for the production of goods.

Budgeted Production

The total amount of products that a company plans to produce over a certain period, according to its budget.

Finished Goods Inventory

The total value of products that are completed and ready for sale but have not yet been sold.