The following information was taken from the 20B income statement of Milburn Company: Pretax profit,$12,000; Total operating expenses,$20,000; Sales revenue,$120,000.Compute the cost of goods sold.
A)$88,000
B)$100,000
C)$108,000
D)$112,000

Question

Quizplus · Accepted Answer

To find the cost of goods sold (COGS), use the formula: Sales Revenue - COGS - Operating Expenses = Pretax Profit. Plugging in the values: $120,000 - COGS - $20,000 = $12,000. Solving for COGS gives COGS = $120,000 - $20,000 - $12,000 = $88,000.

The Following Information Was Taken from the 20B Income Statement