Multiple Choice

Company X reports $200,000 in sales of Widgets in 2019. The Costs of Goods sold for these Widgets is $90,000. All other operating expenses (SG&A, R&D, Depreciation, Other, etc.) are $50,000. Which of the following is the correct representation of the profitability ratios: 1.Gross Profit Margin 45%, Operating Margin 30%. 2.Gross Profit Margin 55%, Operating Margin 30%. 3.Gross Profit Margin 45%, Operating Margin 20%. 4.Gross Profit Margin 55%, Operating Margin 20%.