If the cost of goods sold percentage for woods changes to 60% instead of 65%, with a wood revenue of 58,400, what is the estimated cost of the woods?

If the cost of goods sold percentage for woods changes to 60% instead of 65%, with a wood revenue of 58,400, what is the estimated cost of the woods?

• A. 35,040
• B. 58,400
• C. 28,000
• D. 40,000

Answer: (A)

COGS is the portion of revenue that represents cost of the goods sold. If the cost of goods sold percentage is 60%, multiply the wood revenue by 0.60 to estimate cost: 58,400 × 0.60 = 35,040. This matches the required 60% of revenue for woods. The other numbers don’t align with 60% (they would correspond to 100%, about 48%, or about 68% of revenue).

COGS is the portion of revenue that represents cost of the goods sold. If the cost of goods sold percentage is 60%, multiply the wood revenue by 0.60 to estimate cost: 58,400 × 0.60 = 35,040. This matches the required 60% of revenue for woods. The other numbers don’t align with 60% (they would correspond to 100%, about 48%, or about 68% of revenue).