How Is Gross Margin Percent Calculated

question 10

Multiple Choice

How is gross margin percent calculated?

• A) Gross margin divided by net sales
• B) Add operating and interest expenses together and divide by gross sales
• C) Net sales multiplied by gross margin
• D) Cost of goods sold divided by gross sales
• E) Divide net profit by net sales

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Definitions:

Total Variable Costs

The sum of all costs that vary directly with the level of production or output in the short term.

Output

The quantity of goods or services produced within a given time frame by a firm, sector, or country.

Equilibrium Price

The market value at which there's a perfect match between quantity of goods available and quantity desired by buyers.

Cockatoos

A type of large, often colorful and noisy parrot native to Australia and surrounding islands.