Question

opening inventory 200000 closing inventory 120000 inventory turnover ratio 8 times selling price 25 %above cost calculate gross profit ratio​

Answer 1

Answer:

inventory turnover ratio

=. cost of revenue from operation/ average inventory

average inventory = opening + closing inventory /2

average inventory = 200000+120000/2

= 160000

8=. Cost of revenue from operation/160000

Cost of revenue= 160000×8

= 1280000

gross profit = 1280000×25/100

= 320000

Selling price = cost + profit

= 1280000+320000=1600000

gross profit ratio = gross profit / sales ×100

= 320000/1600000×100= 20%

Answer 2

Answer:

Gross Profit Ratio will be 20 %

Explanation:

Given :

Opening Inventory = 200000

Closing Inventory = 120000

Inventory Turnover Ratio = 8 times

Selling Price 25 % above Cost

To find :

Calculate Gross Profit Ratio

Solution :

Inventory Turnover Ratio =

$\Rightarrow{\sf{\dfrac{Cost \: Of \: Goods \: Sold}{Average \: Inventory}}}$

$\Rightarrow{\sf8={\dfrac{Cost \: Of \: Goods \: Sold}{Average \: Inventory}}}$

Average Inventory =

$\Rightarrow{\sf{\dfrac{Opening \: Inventory \: + \: Closing \: Inventory}{2}}}$

$\Rightarrow{\sf{8 \: = \: {\dfrac{Cost \: Of \: Goods \: Sold}{\frac{2,00,000 \: + \: 1,20,000}{2}}}}}$

$\Rightarrow{\sf{8 \: = \dfrac{Cost \: Of \: Goods \: Sold}{1,60,000}}}$

⇒ Cost of Goods Sold = 1,60,000 × 8

Cost of Goods Sold = 12,80,000

Selling Price 25 % above cost

$\Rightarrow{\sf{12,80,000 \times \dfrac{25}{100}}}$

⇒ 3,20,000

⇒ Net Sales = 12,80,000 + 3,20,000

Net Sales = 16,00,000

Gross Profit = Net Sales - Cost Of Goods Sold

⇒ 16,00,000 - 12,80,000 = 3,20,000

Gross Profit = 3,20,000

Gross Profit Ratio =

$\Rightarrow{\sf{\dfrac{Gross\:Profit}{Net\:Sales} \times 100}}$

$\Rightarrow{\sf{\dfrac{3,20,000}{1,60,000} \times 100}}$

⇒ 20 %

∴ Gross Profit Ratio will be 20 %