Question

opening inventory Rs.1,20,000; closing inventory 1.5 times of opening inventory; inventory turnover ratio 6 times ; selling price 33.5% above cost. calculate the gross profit ratio

Answer 1

here is the answer of your question

Answer 2

Answer:

The gross profit ratio is the percentage of gross profit to net sales, which indicates the business's profitability.

Explanation:

To calculate the gross profit ratio, we first need to calculate the cost of goods sold and then calculate the gross profit.

Given that the opening inventory is Rs. 1,20,000, the closing inventory is 1.5 times the opening inventory, and the inventory turnover ratio is 6 times, we can calculate the cost of goods sold as follows:

Cost of goods sold = (Opening inventory + Closing inventory)/2

= (1,20,000 + 1.5 x 1,20,000)/2

= Rs. 1,80,000

We are also given that the selling price is 33.5% above the cost price. Therefore, the gross profit can be calculated as follows:

Gross profit = Selling price - Cost price

= 1.335 x Cost price - Cost price

= 0.335 x Cost price

Now we can calculate the gross profit ratio as follows:

Gross profit ratio = Gross profit/Net sales x 100%

Since we are not given the net sales, we cannot calculate the gross profit ratio directly. However, we can use the inventory turnover ratio to find the net sales. The inventory turnover ratio is the cost of goods sold divided by the average inventory. Therefore, we can write:

Inventory turnover ratio = Cost of goods sold/Average inventory

Solving for average inventory, we get:

Average inventory = Cost of goods sold/Inventory turnover ratio

= 1,80,000/6

= Rs. 30,000

Now we can find the net sales as follows:

Net sales = Cost of goods sold + Gross profit

= 1,80,000 + 0.335 x Cost price

Substituting the value of cost price, we get:

Net sales = 1,80,000 + 0.335 x 1,80,000

= Rs. 2,41,800

Finally, we can calculate the gross profit ratio as follows:

Gross profit ratio = Gross profit/Net sales x 100%

= 0.335 x Cost price/2,41,800 x 100%

= 13.88%

Therefore, the gross profit ratio is 13.88%.

To learn more about gross profit ratio, click on the given link.

https://brainly.in/question/42370709

To learn more about percentage of gross, click on the given link.

https://brainly.in/question/15922095

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