delmont movers has a profit margin of 6.2 percent and net income of $4

QUESTION

delmont movers has a profit margin of 6.2 percent and net income of $48900. what is the common size percentage for the cost of goods sold if that expense amounted to $379000 for the year ?
Recall that common size just refers to the % of Total Sales on the Income Statement. So all we need to find is our Sales because the Common Size % for COGS will be COGS/Sales. So we know our NI is $48,900 and our profit margin (NI/S) = 6.2%. (48900)/(Sales)

= 6.2%, solving for Sales we get $788,710. Our COGS is $379,000 so our Common Size ratio is (COGS)/(Sales) which is equal to ($379,000)/($788,710) = 48.1% Hope this helps!

ANSWER:

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