Question

following figures have been extracted from misba mills ltd. stock at the end of the year 1,50,000,stock at the begining of the year 90,000 .stock turnover ratio is 8 times, selling price 25 percent above cost. compute the amount of gross profit and sales.​

Answer 1

Answer:

stock turnover ratio =

cost of goods sold/ average stock

average stock = opening +closing/2

= 150000+90000/2

=120000

8=. cost of good sold/120000

cost of good sold = 120000×8

=960000

given that selling price 25% above cost

gross profit = 960000×25%

= 240000

selling price = cost + gross profit

= 960000+240000

=1200000