Question

Olly Company is a merchandising business that sells dog food. Based on the following information, what is the gross margin for Olly Company? Sales Revenue $ 500,000 Cash 100,000 Accounts Receivable 50,000 Inventory 25,000 Cost of goods sold 300,000 Operating expenses 40,000

Answer 1

$200,000

Step-by-step explanation:

The computation of the gross margin is shown below:

= Sales revenue - cost of goods sold

= $500,000 - $300,000

= $200,000

Simply we deduct the cost of goods sold from the sales revenue so that the accurate amount can be calculated i.e gross margin

All other information which is given is not relevant. Hence, ignored it.