If a company's revenue is $530,000, profit before taxes is $98,000, and product costs are $390,000 then:a) The company's gross margin totals $98,000 b) The company's period costs total $140,000. c) The company's period costs cannot be determined d) The company's contribution margin totals $140,000 e) The company's gross margin totals $140,000

Question

Business

Brayan

24 May, 15:05

If a company's revenue is $530,000, profit before taxes is $98,000, and product costs are $390,000 then:a) The company's gross margin totals $98,000 b) The company's period costs total $140,000. c) The company's period costs cannot be determined d) The company's contribution margin totals $140,000 e) The company's gross margin totals $140,000

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Answers (1)

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Charlie Ochoa · Answer 1

Answer: Option (e) is correct.

Explanation:

Given that,

Company's revenue = $530,000

Profit before taxes = $98,000

Product costs = $390,000

Company's gross margin = Company's revenue - Product costs

= $530,000 - $390,000

= $140,000

Therefore, The company's gross margin totals $140,000.