Ziehart Pharmaceuticals reported Net Sales of $195,000 and Cost of Goods Sold of $66,600. Candy Electronics Corporation reported Net Sales of $53,000 and Cost of Goods Sold of $39,800 Required: 1. Calculate the gross profit percentage for both companies. (Round your answers to 1 decimal place.) 2. Which company has a greater proportion of its sales available to cover expenses other than cost of goods sold?

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ewomazinoade ewomazinoade · Answer 1 · 2022-03-15T13:48:15+01:00

The gross profit percentage for Ziehart Pharmaceuticals is 74.5%.

The gross profit percentage for Candy Electronics Corporation is 57.1%.

The company better able to use its sales to cover expenses is Candy Electronics Corporation.

The gross profit percentage is the ratio of net sales to total sales.

gross profit percentage = net sales / gross sales x 100

Gross sales is the sum of net sales and cost of goods sold

Ziehart Pharmaceuticals = [195,000 / (195,000 + 66,000)] x 100 = 74.5

Candy Electronics = [53,000 / (53,000 + 39800)] x 100 = 57.1

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