15 Rogue Industries reported the following items for the cur

15) Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $100,000; and Taxes = $300,000; Rogue\'s operating profit margin is equal to

Solution

Operating margin = ( opearting income / sales ) * 100

Operating income = Sales - cost of goods sold - administrative expense - marketing expense - depreciation expense

Operating income = 3,000,000 - 1,500,000 - 150,000 - 100,000 - 170,000

Operating income = $1,080,000

Operating margin = ( 1,080,000 / 3,000,000) * 100

Operating margin = 0.36 * 100

Operating margin = 36%