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If sales are Rs. 2,000 and the rate of gross profit on cost of goods sold is 25%, then the cost of goods sold will be
- a)Rs. 2,000.
- b)Rs. 1,500.
- c)Rs. 1,600.
- d)None of the above.
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
If sales are Rs. 2,000 and the rate of gross profit on cost of goods s...
This can be represented as:
Let us assume the Cost Price is Rs.100
Profit Margin on Cost is @25% i.e. Rs.25
There fore the selling Price will be = Cost + Profit = SP
= Rs.100 + Rs.25 = Rs.125
If the Sales are Rs.2000
the cost of goods sold will be Rs.2000/125 * 100
Cost of good sole = Rs.1600.
Let us assume the Cost Price is Rs.100
Profit Margin on Cost is @25% i.e. Rs.25
There fore the selling Price will be = Cost + Profit = SP
= Rs.100 + Rs.25 = Rs.125
If the Sales are Rs.2000
the cost of goods sold will be Rs.2000/125 * 100
Cost of good sole = Rs.1600.
Most Upvoted Answer
If sales are Rs. 2,000 and the rate of gross profit on cost of goods s...
Calculation of Cost of Goods Sold
The cost of goods sold (COGS) can be calculated using the following formula:
COGS = Sales - Gross Profit
Given that the sales are Rs. 2,000 and the rate of gross profit on cost of goods sold is 25%, we can calculate the gross profit as follows:
Gross Profit = 25% of COGS
Gross Profit = 0.25 x COGS
We can substitute this expression for Gross Profit in the formula for COGS to get:
COGS = Sales - 0.25 x COGS
Solving for COGS, we get:
COGS + 0.25 x COGS = Rs. 2,000
1.25 x COGS = Rs. 2,000
COGS = Rs. 2,000 / 1.25
COGS = Rs. 1,600
Therefore, the cost of goods sold is Rs. 1,600.
Conclusion
The cost of goods sold can be calculated using the formula COGS = Sales - Gross Profit. In this question, we were given the sales and the rate of gross profit on cost of goods sold. Using this information, we calculated the cost of goods sold to be Rs. 1,600.
The cost of goods sold (COGS) can be calculated using the following formula:
COGS = Sales - Gross Profit
Given that the sales are Rs. 2,000 and the rate of gross profit on cost of goods sold is 25%, we can calculate the gross profit as follows:
Gross Profit = 25% of COGS
Gross Profit = 0.25 x COGS
We can substitute this expression for Gross Profit in the formula for COGS to get:
COGS = Sales - 0.25 x COGS
Solving for COGS, we get:
COGS + 0.25 x COGS = Rs. 2,000
1.25 x COGS = Rs. 2,000
COGS = Rs. 2,000 / 1.25
COGS = Rs. 1,600
Therefore, the cost of goods sold is Rs. 1,600.
Conclusion
The cost of goods sold can be calculated using the formula COGS = Sales - Gross Profit. In this question, we were given the sales and the rate of gross profit on cost of goods sold. Using this information, we calculated the cost of goods sold to be Rs. 1,600.
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If sales are Rs. 2,000 and the rate of gross profit on cost of goods sold is 25%, then the cost of goods sold will bea)Rs. 2,000.b)Rs. 1,500.c)Rs. 1,600. d)None of the above.Correct answer is option 'C'. Can you explain this answer?
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