Question

If sales is Rs. 5,00,000 ; Gross profit is 25% on cost. Calculate Cost of goods sold​

Answer 1

Answer:

This is defined in accounting standard.

Sales

less Cost of goods sold

Equal

Gross profit

less

Overhead

equals

Net profit.

In your case the gross profit is 25%, which means 125,000.

So, the Cost of Goods Sold is (500,000–125,000). Which is 375,000.

You will see in accounting:

Sales 500,000

less CoGS 375,000

Gross Profit 125,000

Answer 2

Answer:

Cost of Goods Sold = Rs. 4,00,000

Explanation:

Given :

Sales is Rs. 5,00,000

Gross profit is 25% on cost

To find :

Cost of goods sold

Solution :

Net Sales = Cost of Goods Sold + Gross Profit

Let,

Cost of Goods Sold = x

5,00,000 = x + 25 % of x

5,00,000 = x + 25x/100

5,00,000 = x + 0.25x

5,00,000 = 1.25x

x = 5,00,000 / 1.25

x = 4,00,000

Cost of Goods Sold = Rs. 4,00,000

∴Cost of Goods Sold = Rs. 4,00,000