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Delmont Movers has a profit margin of 7.1 percent and net income of $63,700. What is the common-size percentage for the cost of goods sold if that expense amounted to $522,600 for the year? Group of answer choices

Answer :

pedrocarratore

Answer:

0.5825 or 58.25%

Explanation:

If the profit margin is 7.1% and net income is $63,700, total revenue for Delmont Movers is given by:

[tex]R = \frac{\$63,700}{0.071}=\$897,183.10[/tex]

The common-size percentage for the cost of goods sold (COGS), since the cost of goods sold is $522,600, is:

[tex]COGS = \frac{C}{R}=\frac{\$522,600}{\$897,183.10}\\ COGS =0.5825=58.25\%[/tex]

The common-size percentage for the cost of goods sold is 0.5825 or 58.25%

abiolataiwo2015

The common-size percentage for the cost of goods sold if that expense amounted to $522,600 for the year is 58.25%.

Common-size percentage for the cost of goods sold

Using this fomula

COGS common-size percentage=Expense/(Net income/Profit margin)

Let plug in the formula

COGS common-size percentage = $522,600 / ($63,700 / .071)

COGS common-size percentage = $522,600 /897,183

COGS common-size percentage= .58248×100

COGS common-size percentage= 58.25% (Approximately)

Inconclusion the common-size percentage for the cost of goods sold if that expense amounted to $522,600 for the year is 58.25%.

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