Flingers inc. reveals the following information in their annual report for fy 2017. earnings and expenses sales $10,000,000 cost of goods sold $5,000,000 pretax earnings $500,000 selected balance sheet items merchandise inventory $80,000 total assets $2,000,000 upper management plans to cut cost of goods sold by 5% for the coming year but retain the same sales. what will flingers' profit margin be for 2018?

What will Flingers' profit margin be for 2018?

Profit Margin  $750,000  

Explanation:

Income Statement2017

Sales                                   10,000,000  

Cost of Goods Sold        -5,000,000  

Net Income                         5,000,000  

Non Operating Expenses-4,500,000  

Net Income After Taxes  $500,000     5%

Income Statement        2018

Sales                                   10,000,000  

Cost of Goods Sold        -4,750,000  

Net Income                           5,250,000  

Non Operating Expenses-4,500,000  

Net Income After Taxes     750,000     7,5%

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total