Question

Low Carb Diet Supplement Inc. has two divisions. Division A has a profit of $199,000 on sales of $2,340,000. Division B is able to make only $32,500 on sales of $368,000. a. Compute the profit margins (return on sales) for each division. (Input your answers as a percent rounded to 2 decimal places.)

Answer 1

Instructions are listed below.

Step-by-step explanation:

Giving the following information:

Division A has a profit of $199,000 on sales of $2,340,000. Division B is able to make only $32,500 on sales of $368,000

Gross profti margin= gross profit/revenue

Division A:

Gross profit margin= 199,000/2,340,000= 0.085= 8.5%

Division B:

Gross profit margin= 32,500/368,000= 0.088= 8.8%