Answer:
King Company Queen Company
Sales Revenue $56,000 $117,000
(112000+5000)
Sales Returns & Allowance $6,000 $5,000
(56000-50000)
Net Sales $50,000 $112,000
COGS $33,000 $80,000
Gross Profit $17,000 $32,000
(50000-33000)
Operating Expenses $12,000 $18,000
Net Income $5,000 $14,000
Profit Margin % = [Net Income / Net Sales]
King Company = 5,000/ 50,000* 100 = 10.00%
Queen Company = 14,000 / 112,000 * 100 = 12.50%
Gross Profit Rate % = [Gross Profit / Net Sales]
King Company = 17,000 / 60,000 = 34.00%
Queen Company = 32,000 / 112,000 = 28.57%
