Answer:
b. gross margin would be $4,000.
Explanation:
Distribution costs are considered when calculating gross margin.
Gross margin is given by sales subtracted by the cost of goods sold:
[tex]GM = \$9,000-\$5,000=\$4,000[/tex]
The gross margin would be $4,000.
Although the freight cost should be included when calculating net income, more administrative costs could be added and, thus, net income cannot be determined with the given information.
