Question

A company earned $3,000 in net income for October. Its net sales for October were $10,000. Its profit margin is:
A.3%.
B.30%.
C.33%.
D.333%.
E.$7,000.

Answer 1

Answer:

Option B.

Explanation:

Given information:

Net income = $3,000

Net sales = $10,000

Profit margin formula:

$\text{Profit margin}=\dfrac{\text{Net income}}{\text{Net sales}}\times 100$

Substitute given values in the above formula.

$\text{Profit margin}=\dfrac{3000}{10000}\times 100$

$\text{Profit margin}=30$

The profit margin is 30%. Therefore, the correct option is B.