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You are given the following statement of profit or loss for the year ended 31 May 2022: multicolumn(2)(|c|){ Space Itd Statement of profit or loss for the year ended 31 May 2022 Sales & 4,300 Cost of sales & (3000) Gross profit & 1,300 Distribution expense & (280) Administrative expense & (150) Depreciation expense & (180) Operating profit & 690 Interest expense & (70) Profit before taxation & 620 Taxation & (121) Profit for the year & 499 What is the company's Gross profit margin for the year? 30.2 %

Question

You are given the following statement of profit or loss for the year ended 31 May 2022:

 multicolumn(2)(|c|){
Space Itd 
Statement of profit or loss 
for the year ended 31 May 
2022
 
 Sales & 4,300 
 Cost of sales & (3000) 
 Gross profit & 1,300 
 Distribution expense & (280) 
 
Administrative 
expense
 & (150) 
 Depreciation expense & (180) 
 Operating profit & 690 
 Interest expense & (70) 
 Profit before taxation & 620 
 Taxation & (121) 
 Profit for the year & 499 


What is the company's Gross profit margin for the year?
 30.2 %

You are given the following statement of profit or loss for the year ended 31 May 2022: multicolumn(2)(|c|){ Space Itd Statement of profit or loss for the year ended 31 May 2022 Sales & 4,300 Cost of sales & (3000) Gross profit & 1,300 Distribution expense & (280) Administrative expense & (150) Depreciation expense & (180) Operating profit & 690 Interest expense & (70) Profit before taxation & 620 Taxation & (121) Profit for the year & 499 What is the company's Gross profit margin for the year? 30.2 %

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YvetteVeteran · Tutor for 10 years

Answer

Gross Profit Margin = \(\frac{1300}{4300}\times 100\) = 30.23, which rounds to 30.2% (round to one decimal place)

Explain

## Step1: <br />Understand the requirement of the problem. The question asks for the Gross profit margin. <br /><br />## Step2: <br />Review the statement provided. Find that sales paper amount to \(f' 4300,000 \) and that Cost of sales corresponds to \( f'3000,000 \). Gross profit entails a total of \( f'1300,000 \).<br /><br />## Step3:<br /> Recall the formula for the Gross profit margin. It is the ratio of Gross profit to Sales, then times 100% to convert it to a percentage expressed in decimal notation.<br /><br />### Formula : \(\displaystyle \text{{Gross profit margin (\%)}} = \frac{{\text{{Gross Profit}}}}{ \text{{Sales}}} \times 100\)
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