Figure 10-3
Farr Company had the following information: $\begin{array}{lcc}
\text { Revenues } & & £ 400,000 \
\text { Cost of goods sold: } &£ 100,000 & \
\text { Direct materials } & 50,000\
\text { Overhead } & 50,000 & 200,000 \
\text { Gross profit } & & £ 200,000 \
\text { Selling and administrative expenses } & & 75,000 \
\text { Operating income } & & £ 125,000 \

\end{array}$
-Refer to Figure 10-3. What is the mark up based on cost of goods sold?
A)50.0%
B)100.0%
C)37.5%
D)62.5%

Question

Figure 10-3
Farr Company had the following information: $\begin{array}{lcc}
\text { Revenues } & & £ 400,000 \
\text { Cost of goods sold: } &£ 100,000 & \
\text { Direct materials } &   50,000\
 \text { Overhead } & 50,000 & 200,000 \
 \text { Gross profit } & & £ 200,000 \
\text { Selling and administrative expenses } & & 75,000 \
 \text { Operating income } & & £ 125,000 \

\end{array}$
-Refer to Figure 10-3. What is the mark up based on cost of goods sold?
A)50.0%
B)100.0%
C)37.5%
D)62.5%

Quizplus · Accepted Answer

The markup based on the cost of goods sold is calculated as the gross profit divided by the cost of goods sold. Here, the gross profit is £200,000 and the cost of goods sold is £200,000. Therefore, the markup is (£200,000 / £200,000) * 100% = 100%.

Figure 10-3 Farr Company Had the Following Information -Refer to Figure 10-3

Figure 10-3
Farr Company Had the Following Information -Refer to Figure 10-3