In the context of computing the cost of sales, the common way to do this is to use the percent-of-sales method, which is a method for expressing each expense item as a percentage of ________.
A) net sales
B) gross profit
C) net income
D) operating income
E) cost of sales

Question

Quizplus · Accepted Answer

The percent-of-sales method calculates each expense item as a percentage of net sales. This helps to determine the cost of sales by identifying expenses that are directly related to the production or sale of goods, and allocating them accordingly. Gross profit, net income, operating income, and cost of sales are all related to the calculation of cost of sales, but the percent-of-sales method specifically uses net sales as the basis for determining expenses.

In the Context of Computing the Cost of Sales, the Common