Accounting II Problem percentage of sales?

Question

This is a problem from my accounting II class.

What would the operating expenses as a percentage of sales be if this is all the information I have:

Net Sales 200,000
Cost of goods sold 140,000
gross profit 60,000
net income 14,000
ending merchandise inventory 20,000
accounts receivable 22,000


I think you have to divide something by sales, but what????
Do I just divide Cost of goods sold by sales?
140,000/200,000=70%

Is this correct?

Answer 1

Net Income = Gross Profit - Operating Expenses

==> Operating Expenses = Gross Profit - Net Income
= 60,000 - 14,000
= 46,000

Operating Expenses as a percentage of sales
= (Op. Exp/Sales) * 100
= (46,000/200,000) * 100
= 23%

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Answer 2

Best Answer - Chosen By Voters Best Answer - Chosen By Voters THE ANSWERS: Q1. In the n the month: Bakar earns 1000 + 100(n - 1). His pay is increasing in arithmetic progression, with a starting value of 1000 and a common difference of 100. Chandran makes 100 * 1.5^ (n - 1). His pay is increasing in geometric progression, with a starting value of 100 and a common ratio of 1.5. a) At the end of the first year, Chandran has: 6(2*1000 + 11*100) = 6 * 3100 = 18600 RM. That's using the formula for the sum of an arithmetic series. You can also find the average monthly pay and multiply that by 6. It's not really different though. Chandran has 100(1.5^12 - 1) / (1.5 - 1) = 25749.27 RM. That's using the formula for the sum of a geometric series. I don't know any alternative technique for doing this, unless you are going to calculate from first principles, as you do when proving the formula. Ang earns 2000 * 12 = 24000 RM. If you want another method, add up 12 lots of 2000, but what's the difference? b) Work out the income of each for the second year, taking into account the increased salary for Ang, and the changes in the starting pay and common difference for Chadran. Presumably Bakar continues in the same manner as before. When you have the incomes worked out for the second year, you can find the percentage increase. c) i) RM10778.00 RM10938.07 RM11097.02 ii) The 3.5% is going to give you a higher interest... the difference in the compounding periods is negated by the fact that each different compounding period has a higher interest rate than the previous. Had all been the same interest rate the monthly one would have given you a slightly larger return. For instance all been 2.5% per annum... the quarterly (every three months) would have yielded only 776.33 None of them... they don't pay enough... I would invest the money in stocks... Q2. a) RM 300-8% per annum for 18yrs 1st year- 300(8/100) =24 Hence RM300+RM24=RM324 2nd year- 324(8/100) =25.92 Hence RM324+RM25.92=RM349.92 *this continues until the 18th year-RM1198.79 (ans) b) RM500- 8% per annum-total investment will be more than RM25000 for the first time Use the same technique above in Q2 (a) to apply on this question.. The answer will be 50years 11months-RM25171.42

Answer 3

Cost of goods sold = 1,40,000 and profit realised is 60,000 out of which 14,000 is net income and 42,000 are other expenses. That leaves 4000 as the expense of selling. That divided by the sales and expressed as a percentage will be the needed answer. In this case, 4000 / 200,000 is 1/50 and as a percentage is 2%.

Answer 4

Yes.