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Answer:
<h2><em>$960,000</em></h2>Step-by-step explanation:
The gross profit rate of the company is expressed as where C is the cost of goods sold and S is the net sales. If the net sales S = $1,200,000, and gross profit ratio is 0.20, the cost of goods sold will be expressed as shown;
Making C the subject of the formula from the expression given.
Substituting P = 0.20 and S = $1,200,000 into the resulting equation, we will have;
<em>Hence the cost of goods sold is $960,000</em>
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