Question

If gross profit ratio is $25\%$ sales, it is __________$\%$ on cost.

• A. $33.33\%$
• B. $20\%$
• C. $25\%$
• D. $50\%$

Answer 1

The correct option is A $33.33\%$

Assume Sale = $200$ and Gross profit = $25\%$ on sales = $50$

Cost + Gross profit = Sales

Cost + $50$ = $200$

Cost = $150$

Now, Gross profit % on Cost = Gross Profit x $100$

Cost

= [$50/150$ ] x $100$

= $33.33\%$.