[The Following Information Applies to the Questions Displayed Below

question 75

Multiple Choice

[The following information applies to the questions displayed below.]

Sanchez Company engaged in the following transactions during Year 1:

1) Started the business by issuing $42,000 of common stock for cash.
2) The company paid cash to purchase $26,400 of inventory.
3) The company sold inventory that cost $16,000 for $30,600 cash.
4) Operating expenses incurred and paid during the year, $14,000.

Sanchez Company engaged in the following transactions during Year 2:

1) The company paid cash to purchase $35,200 of inventory.
2) The company sold inventory that cost $32,800 for $57,000 cash.
3) Operating expenses incurred and paid during the year, $18,000.

Note: Sanchez uses the perpetual inventory system.

-What is Sanchez's gross margin for Year 2?

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Definitions:

External Environment

Factors outside of an organization that can impact its operations and success, including economic, social, and political conditions.

Organization's Boundaries

The defined limits that distinguish the activities, responsibilities, and jurisdictions of an organization from others.

Management Information System

An organized system for collecting, storing, analyzing, and disseminating information for the purpose of facilitating management decision-making processes.

Information Technology

Leveraging computers, storage units, networking components, and other material devices, foundations, and processes to develop, handle, keep safe, store, and distribute all varieties of electronic data.