In the window replacement file, a job produced revenue of $112,000 and gross profit of $28,000. What gross margin percentage did it earn?
Correct Answer
C) 25 percent.
Gross margin is gross profit divided by revenue: $28,000 / $112,000 = 25 percent.
Why This Is the Correct Answer
Gross margin is gross profit divided by revenue: $28,000 / $112,000 = 25 percent.
Why the Other Options Are Wrong
Option A: 20 percent.
20 percent. is below the supported result for margin calculation; it likely uses the wrong base, period, or account bucket.
Option B: 22 percent.
22 percent. is below the supported result for margin calculation; it likely uses the wrong base, period, or account bucket.
Option D: 30 percent.
30 percent. is above the supported result for margin calculation; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Margin fence: markup starts at cost, margin looks back from price.
Reference Hint
Study anchor (closed-book): memorize Margin calculation from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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