Question

If cost of goods sold is Rs. 720000, Total sales are Rs. 1000000, Return inward is Rs. 40000 and Return Outward is Rs. 12000 Then Gross Profit Ratio will be - a) 28% b)25% c)33.5% d)26.5%​

Answer 1

Gross Profit Ratio is 25%

Explanation:

Formula to calculate Gross Profit Ratio =  (Gross profit ÷Net sales) x 100

Given Sales 10,00,000

Sales Return 40,000 (Return inward)

Cost of Goods Sold 7,20,000

1st Calculate Net Sale = Total sale - Sale Return (10,00,000-40,000) = 9,60,000

2nd Calculate Gross Profit by using formula =Sales -Cost of goods sold

9,60,000-7,20,000 = 2,40,000

Now put the amount in Formula = 2,40,000÷ 9,60,000 x 100 = 25

Hence the  Gross Profit Ratio is 25%