Katz Group Had the Following Income Statement for the Month

question 143

Multiple Choice

Katz Group had the following income statement for the month of May.
$\begin{array}{l}\text { Sales revenue } &&\$428,000\\\text { Cost of goods sold } &&205,440\\\text { Gross margin }&&222,560\\\text { Less: }\\&\text { Selling expenses }&81,320\\&\text { Administrative expenses }&72,760\\\text { Operating income }&&\$68,480\end{array}$
-Refer to the Figure.What was the gross margin percentage?

• A)17%
• B)19%
• C)48%
• D)52%

---

Definitions:

Marginal Revenue

The additional revenue a firm receives from selling one more unit of a product or service.

Marginal Cost

The expense associated with the next unit produced, emphasizing its role in production decisions and price setting.

Economic Profit

This is the difference between total revenue and total costs, including both explicit and implicit costs.

Monopoly Profit

The excess profits a monopoly firm earns over what it would earn if the industry were perfectly competitive, due to its control over the market supply and pricing.