Exercise2

Tantramar Shipbuilding Company had the following information available at its year end September 30, 2017. Accounts are listed in alphabetical order for the convenience of the bookkeeper.

Advertising Expense...........................................         15,000

Cost of Goods Sold............................................       476,500

Depreciation Expense.........................................         41,000

Freight-out..........................................................           7,500

Interest Revenue................................................         11,000

Office Salaries Expense......................................         65,000

Office Supplies...................................................           6,000

Office Supplies Expense.....................................           7,500

Sales..................................................................       750,000

Sales Discounts..................................................         12,800

Sales Returns & Allowances...............................         25,700

Instructions

a)   Calculate the gross profit margin for Tantramar.

b)    Calculate the profit from operations for Tantramar.

c)    Calculate the profit margin for Tantramar.

d)    List three actions which Tantramar could take to increase its profit margin.

e)   If last year's gross profit margin was 39%, comment on the company's results this year.