Question

Darius, Inc. has the following income statement (in millions): DARIUS, INC. Income Statement For the Year Ended December 31, 2012 Net Sales $300 Cost of Goods Sold 120 Gross Profit 180 Operating Expenses 44 Net Income $136 Using vertical analysis, what percentage is assigned to Cost of Goods Sold? Group of answer choices 30% 40% 100% None of the above

Answer 1

Answer:

40%

Explanation:

Calculation to determine what percentage is assigned to Cost of Goods Sold

Using this formula

Cost of Goods Sold percentage=

Cost of Goods Sold /Net Sales

Let plug in the formula

Cost of Goods Sold percentage=$120/$300*100

Cost of Goods Sold percentage=0.40*100

Cost of Goods Sold percentage=40%

Therefore the percentage assigned to Cost of Goods Sold is 40%