Question

The managerial accountant at the Frame Shop reported $4,000,000 of operating income and $9,000,000 in sales revenue for the Staple Division.What is the sales margin for the Staple Division?

Answer 1

Answer:

0.4444

or

= 44.44%

Explanation:

Data provided in the question:

Reported operating income = $4,000,000

Reported sales revenue for the Staple Division = $9,000,000

Now,

The sales margin is given as

= ( operating income ) ÷ ( sales )

therefore,

The sales margin for the Staple Division

= $4,000,000 ÷ $9,000,000

= 0.4444

or

= 0.4444 × 100%

= 44.44%