Question

If operating income is $500,000 and total operating revenues are $10,000,000, the correct operating margin is:__________A. 5%B. 20%C. 2%D. 50%

Answer 1

the correct operating margin is 5 %

Step-by-step explanation:

Operating margin is the relationship between operating income and operating revenues.

This relationship is expressed as follows :

Operating margin = Operating income / Operating revenues × 100

= $500,000 / $10,000,000 × 100

= 5 %