Question

Find grosss profit ratio when revenue from operation is ₹600000 , gross profit 25% on cost.

Answer 1

Given :-

Revenue from operations= 600000

Gross Profit= 25% on cost

Cost of goods sold = Revenue from operations - Gross profit

or

Gross Profit = Revenue from operations- Cost of goods sold

25%on cost = 600000 - Cost

0.25 × cost = 600000 - cost

0.25 cost + cost = 600000

1.25 cost = 600000

So, cost = 600000/125 ×100

Cost of goods sold = 480000

So, gross profit will be 25% × 480000

= 120000

Gross profit ratio = Gross profit/ Revenue from operations × 100

= 120000/600000 × 100

= 20%

hope it helps..

Answer 2

20%

Explanation:

Given:

Sales = 6,00,000

Gross Profit = 25% (on cost)

Gross profit ratio = ?

Computation:

Sales = Cost of goods sold + Gross profit

Sales = Cost of goods sold + 25% of Cost of goods sold

6,00,000 = Cost of goods sold + 0.25 Cost of goods sold

6,00,000 = 1.25 Cost of goods sold

6,00,000 / 1.25 = Cost of goods sold

4,80,000 = Cost of goods sold

Sales = Cost of goods sold + Gross profit

6,00,000 = 4,80,000 + Gross profit

1,20,000 = Gross profit

Gross profit ratio = (Gross profit / Net sales ) × 100

= (1,20,000 / 6,00,000) × 100

= 20%

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