If Sales = Rs.8,00,000, Markup Rate =25% of Cost Calculate Cost of Goods Sold = ? 1. Rs. 640,000 2. Rs. 600,000 3. Rs. 200,000

Good answer with logics By Mr. Taimur so agreed to him.Best of luck.

In markup we take the profit in reference to Cost, so consider cost is 100% and Selling price is 125%, so when you take 100% of selling price it will become cost, which will be 640, 000.

Hope it answers your question.

Its No.1, which is Rs.640,000

If cost is 100 the sale will be 125, because markup is 25% on cost

It will be as under

Cost                         Sale

100                          125

 ?                          800,000

800,000 X 100

--------------------      =   640,000

        125

We can also verify it as : 25% of 640,000 will be 160,000 and 640,000+160,000 = 800,000   

answer is option (1) 640,000

i.e 25% of 640,000 = 160,000 + 640,000 = 800,000 is the markup price. Thanks.

Mark up on cost% e.g. on sale% hence cost of goods sold = Sales - Markup

e.g.% of=