The company's gross margin percentage for Year 2 is closest to:

A) 62.5%
B) 4.2%
C) 38.5%
D) 2381.0%

Question

The company's gross margin percentage for Year 2 is closest to:A) 62.5%B) 4.2%C) 38.5%D) 2381.0%

Abdirahman Dahir · Accepted Answer

Final Answer : C, Explanation :  To calculate gross margin percentage, we need to divide gross margin by total revenue and multiply by 100. Gross margin for Year 2 is $5,500 - $3,400 = $2,100. Total revenue for Year 2 is $5,400 + $3,200 = $8,600. Therefore, gross margin percentage for Year 2 is ($2,100 / $8,600) * 100 = 24.42%, which is closest to 38.5% (Choice C). Gross margin percentage = Gross margin ÷ Sales= $500,000 ÷ $1,300,000 = 38.5% (rounded)

The company's gross margin percentage for Year 2 is closest to:

A) 62.5%
B) 4.2%
C) 38.5%
D) 2381.0%

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