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6 April, 17:33

Local Co. has sales of $ 10.2 million and cost of sales of $ 5.7 million. Its selling, general and administrative expenses are $ 550 comma 000 and its research and development is $ 1.2 million. It has annual depreciation charges of $ 1.1 million and a tax rate of 35 %. a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? a. What is Local's gross margin? Local's gross margin is nothing %. (Round to one decimal place.) b. What is Local's operating margin? Local's operating margin is nothing %. (Round to one decimal place.) c. What is Local's net profit margin? Local's net profit margin is nothing %. (Round to two decimal places.)

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  1. 6 April, 18:34
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    a. What is Local's gross margin? (Round to one decimal place.)

    0.4412 / 44.12%

    b. What is Local's operating margin? (Round to one decimal place.)

    0.1618 / 16.18%

    c. What is Local's net profit margin? (Round to two decimal places.)

    0.1049 / 10.49%

    Explanation:

    Local Co.

    Income Statement for the year ended MM DD, YY

    $, million

    Sales 10.20

    -Cost of sales 5.70

    =Gross Income 4.50

    -Selling, general and administrative expenses 0.55

    -Research and development 1.20

    -Annual depreciation charges 1.10

    =Operating Income 1.65

    -Tax rate of 35 %. 0.58

    =Net Income 1.07

    (a) Gross Margin = Gross Income / Sales = 4.50 / 10.20 = 0.4412 = 44.12%

    (b) Operating Margin = Operating Profit / Sales = 1.65 / 10.20 = 0.1618=16.18%

    (c) Net Profit Margin = Net Income / Sales = 1.07 / 10.20 = 0.1049 = 10.49%
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Home » Business » Local Co. has sales of $ 10.2 million and cost of sales of $ 5.7 million. Its selling, general and administrative expenses are $ 550 comma 000 and its research and development is $ 1.2 million. It has annual depreciation charges of $ 1.
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