A company has a gross margin ratio of 45% on net sales of $850,000.Its selling,general and administrative expenses total $212,500.Its cost of goods sold for the period equals:
A)$382,500.
B)$467,500.
C)$170,000.
D)$212,000.
E)$76,500.

Question

Quizplus · Accepted Answer

Gross profit = Net sales x Gross margin ratio
Gross profit = $850,000 x 0.45 = $382,500
Cost of goods sold = Net sales - Gross profit
Cost of goods sold = $850,000 - $382,500 = $467,500. Therefore, the answer is B.

A Company Has a Gross Margin Ratio of 45% on Net