If Net Sales on the Operating Statement for Brandywine Company

question 118

Multiple Choice

If net sales on the operating statement for Brandywine Company were $200,000--and gross sales were $240,000--what would the cost of sales be if the gross margin was 20 percent?

• A) $140,000
• B) $168,000
• C) $160,000
• D) $120,000
• E) Cannot be determined without knowing Brandywine's expenses and net profit.

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Definitions:

Profitable Sales

Transactions that result in excess revenue over the cost of goods sold (COGS) and other expenses, contributing to the financial gain of a business.

High Value-Added

Products or services that undergo significant improvements or enhancements, adding considerable value over the basic cost of materials and production.

Underprice

To offer goods or services at a price lower than the market rate or the cost of production.

Capital Markets

The financial markets for buying and selling equity and debt instruments, facilitating the raising of capital by companies and governments.