Question

if the gross profit Rs. 5000 and the net profit is 25% of gross profit. The expenses must be?​

Answer 1

Answer:

This can be formulated as:

Sales - Cost of goods sold = Gross Profit

If sales is Rs.100

Then Gross Profit becomes Rs.25 (25% of sales)

Cost of Goods sold will be Rs.75 (Rs.100-Rs.25)

Cost of goods sols is equal to 75% of sales

Sales =Cost of goods sold/75%

Sales=Rs.100000

Answer 2

Answer:

If the gross profit Rs.5000 and the net profit is 25% of gross profit. The expenses will be Rs.3750 i.e. (5000*75%)

Explanation:

Given:

1. Gross profit = Rs.5000
2. Net profit = Rs.1250 (5000*25%)
3. Total Expenses =  Rs.3750 i.e. (Rs.5000- Rs.1250)

Gross profit is the difference between trading income and trading expenses.

Net profit is the difference between gross profit plus other income and all indirect expenses.