Incomplete Record (Extract) Sales......................................N10,600 Rent...........................N200 Depreciation of vehicle (cost N5000) 10% ...

Incomplete Record (Extract)

Sales......................................N10,600

Rent...........................N200

Depreciation of vehicle (cost N5000) 10%

Gross profit margin is 20%

What is the cost of goods sold?

Answer Details

To find the cost of goods sold using the gross profit margin, we need to know the formula which is: Gross profit margin = Gross profit / Sales We have the gross profit margin as 20% and the sales as N10,600. 20% of sales = 20/100 * N10,600 = N2,120 (this is the gross profit) Next, we need to use the formula: Gross profit = Sales - Cost of goods sold We know the sales is N10,600 and we need to find the cost of goods sold. N2,120 = N10,600 - Cost of goods sold Therefore, Cost of goods sold = N10,600 - N2,120 = N8,480 So, the cost of goods sold is ₦8,480. Option B is the correct answer.