Farr Company had the following information: $\begin{array}{lrr}
\text {Revenues}&&\$400,000\
\text {Cost of goods sold:}\
\text { Direct materrals } & \$ 100,000 \
\text { Direct labour } & 50,000 & \
\text { Overhead } & \underline{50,000 }& \underline{200,000} \
\text { Gross profit } & & \$ 200,000 \
\text { Selling and administrative expenses } & & \underline{75,000}{} \
\text { Operating income } & &\underline{ \$ 125,000}
\end{array}$ What is the markup based on cost of goods sold?
A)37.5%
B)50.0%
C)62.5%
D)100.0%

Question

Quizplus · Accepted Answer

The markup is calculated as (Gross Profit / Cost of Goods Sold) * 100. Gross Profit is $200,000 and Cost of Goods Sold is $200,000, so the markup is ($200,000 / $200,000) * 100 = 100%.

Farr Company Had the Following Information What Is the Markup Based on Cost of Goods Sold