Local Co. has sales of $10.3 million and cost of sales of $6.1 million. Its selling, general and administrative expenses are $460,000 and its research and development is $1.1 million. It has annual...

Local Co. has sales of $10.3 million and cost of sales of $6.1 million. Its selling, general and administrative expenses are $460000 and its research and development is $1.1 million. It has annual depreciation charges of $1.1 million and a tax rate of 25% . a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? d. If Local Co. had an increase in selling expenses of $270000, how would that affect each of its margins?

Extracted text: Local Co. has sales of $10.3 million and cost of sales of $6.1 million. Its selling, general and administrative expenses are $460,000 and its research and development is $1.1 million. It has annual depreciation charges of $1.1 million and a tax rate of 25%. a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? d. If Local Co. had an increase in selling expenses of $270,000, how would that affect each of its margins? a. What is Local's gross margin? Local's gross margin is %. (Round to one decimal place.) b. What is Local's operating margin? Local's operating margin is %. (Round to one decimal place.) c. What is Local's net profit margin? Locaľ's net profit margin is %. (Round to two decimal places.) d. If Local Co. had an increase in selling expenses of $270,000, how would that affect each of its margins? (Select the best choice below.) O A. Selling expenses do not affect the gross margin, but the increase in such expenses will decrease the other margins. O B. Selling expenses only affect the gross margin, but the increase in such expenses will not affect the other margins. O C. Selling expenses only affect the operating margin, but the increase in such expenses will not affect the other margins. O D. Selling expenses only affect the net profit margin, but the increase in such expenses will not affect the other margins.