I'm being asked to compute the average percent mark up on sales. I saw the solution offered through the bank here at Chegg, but don't understand why they use net sales and not the cost of goods sold. Can someone walk me thorugh the logic behind this?

Financial Accounting (LIBBY LIBBY SHORT) 7th Edition - Chp 14 Problem 7

Thanks.

2012 2011 Income Statement Sales revenue Cost of goods sold $190,000* $ 167,000 100,000 112,000 Gross profit Operating expenses and interest expense 78,000 56,000 67000 53,000 22,000 8,000 14,000 4,000 Pretax income ncome tax Net income $ 14,000 $ 10,000 Balance Sheet Cash Accounts receivable (net) Inventory Operational assets (net) $ 4,000 14,000 40,000 45,000 $ 7,000 18,000 34,000 38,000 $ 103,00O $ 97,000 Current liabilities (no interest) Long-term liabilities (10% interest) Common stock (par $5) Retained earnings $ 16,000 45,000 30,000 12,000 $ 17000 45,000 30,000 5,000 $ 103,00O $ 97,000