A firm's sales are Rs 400,000 and its gross profit ratio is 20% of sales. What is the cost of goods sold?
Answer and explanation
Correct answer: C. Rs 320,000
- Step 1: Gross profit = 400000 x 20% = 80000.
- Step 2: Cost of goods sold = sales - gross profit = 320000.
Answer
Rs 320,000.
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