Question

Stock turnover is 5times average stock 60000rate of gross profit on sales is 20% calculate sales and profit

Answer 1

stock turnover rato= cost of sales÷avg stock

so, cost of sales= 60000×5 =300000

profit=300000×20÷80

=75000

turnover = 300000+ 75000=375000

Answer 2

Gross profit = 75,000

Explanation:

Stock turnover = 5 times

Average stock = 60,000

Rate of gross profit = 20% on Sales

Sales = ?

Gross profit = ?

Computation:

Stock turnover ratio = Cost of goods sold / Average stock

5 = Cost of goods sold / 60,000

300,000 = Cost of goods sold

Computation:

Sales = Cost of goods sold + Gross profit

Sales = 300,000 + 0.20 Sales

0.80 Sales = 300,000

Sales = 375,000

Sales = Cost of goods sold + Gross profit

375,000 = 300,000 + Gross profit

Gross profit = 75,000

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