(1)
The ratio of cost to net sales shows the efficiency of a business in production. This ratio should always be low. Cost to sale ratio also shows the total cost of goods sold against total sale amount.
To compute:
The ratio of cost to sales ratio for company A.
(2)
The ratio of cost to net sales shows the efficiency of a business in production. This ratio should always be low. Cost to sale ratio also shows the total cost of goods sold against total sale amount.
To compute:
The ratio of cost to sales ratio for company G.
(3)
The ratio of cost to net sales shows the efficiency of a business in production. This ratio should always be low. Cost to sale ratio also shows the total cost of goods sold against total sale amount. Higher ratio of cost to sale shows that the total cost is against the sales.
To discuss:
Company with higher cost ratio.
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Managerial Accounting
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