Question

If sales are Rs. $2,000$ and the rate of gross profit on cost of goods sold is $25\%$, then the cost of goods sold will be ______________.

• A. Rs. $2,000$
• B. Rs. $1,500$
• C. Rs. $1,600$
• D. None of these

Answer 1

Answer: (C)

Rs. $1,600$

This can be represented as :

Let us assume the Cost Price is Rs.100

Profit Margin on Cost is @25% i.e. Rs.25

There fore the selling Price will be = Cost +Profit =SP

=Rs.100+Rs.25=Rs.125

If the Sales are Rs.2000

the cost of goods sold will be Rs.2000/125*100

Cost of good sole =Rs.1600.