Question

If the rate of gross profit for department 'N' is 25% of cost, the amount of gross profit on a turnover of Rs. 4,00,000 will be
(A) Rs. 40,000
(B) Rs. 80,000
(C) Rs. 60,000
(D) Rs. 1,00,000​

Answer 1

Answer:

$\purple{ \large{D)Rs.1,00,000}}$

$\purple{ \mathfrak{ \underline{Solution}}}$

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

❣Hope this helps you✌

Answer 2

Concept

Gross profit is the profit earned by sellers by the activities related to manufacturing and selling its product and services.

Given

Percentage of gross profit is 25% of cost and the turnover is Rs. 400000.

To find

The amount of gross profit on the turnover of Rs. 400000.

Explanation

We have been given gross profit as 25% of cost and turnover being Rs.400000.

let the cost of the department be x.

Gross profit=x*25/100

=x/4.

Turnover=cost +profit

400000=x+x/4

400000=(4x+x)/4

400000=5x4

1600000=5x

x=1600000/5

x=320000

So,the gross profit will be 320000/4

(Calculated above as x/4 and we have assumed x as cost)

=Rs80000.

Hence the gross profit is Rs.80000 which is option B.

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