Question

Trial Balance of Departmental Store shows Sales Promotion Expenses - 2,40,000. Sales of Dept A and B were - A 3,60,000, B-37,20,000. Calculate the amount of Sales Promotion Expenses to be allocated to dept. B Select one: a. 1,80,000 b. 1,90,000 c. 1,70,000 d. * 1,60,000​

Answer 1

Answer:

(a) Cost of goods available for sales which means total goods produced during the year.

Cost of Production = (opening stock + Purchase + Wages - Purchase Return)

= 25,000 + (7,50,000 + 3,00,000) + 1,00,000 - 10,000

= Rs. 11,65,000

(b) Cost of goods sold = Cost of Production - Closing Stock

i.e., 11,65,000 - 30,000 = Rs. 11,35,000

(c) Gross Profit For computing gross profit, preparation of Trading account would be appropriate.