If stock turnover ratio = $6$ times; Average stock = $R s .8, 000$ ; Selling price = $25$ % above cost. What is the amount of gross profit?

R s .2, 000

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R s .4, 000

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R s .10, 000

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R s .12, 000

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Solution

The correct option is A $R s .12, 000$
Stock turnover ratio = Cost of goods sold/Average inventory
$6$ = Cost of goods sold/ $8000$
Cost of goods sold = $R s . 48000$
Selling price = $25$ % above cost
Therefore Gross profit = Cost of goods sold x $25$ %
= $48000$ x $25$ %
= $R s . 12000$

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If stock turnover ratio = 6 times; Average stock = Rs.8,000; Selling price = 25% above cost. What is the amount of gross profit?

The correct option is A Rs.12,000Stock turnover ratio = Cost of goods sold/Average inventory 6 = Cost of goods sold/ 8000Cost of goods sold = Rs.48000Selling price = 25 % above costTherefore Gross profit = Cost of goods sold x 25% = 48000 x 25% = Rs.12000

If stock turnover ratio = $6$ times; Average stock = $R s .8, 000$ ; Selling price = $25$ % above cost. What is the amount of gross profit?

The correct option is A $R s .12, 000$
Stock turnover ratio = Cost of goods sold/Average inventory
$6$ = Cost of goods sold/ $8000$
Cost of goods sold = $R s . 48000$
Selling price = $25$ % above cost
Therefore Gross profit = Cost of goods sold x $25$ %
= $48000$ x $25$ %
= $R s . 12000$