Question

If the rate of gross profit on sales is 25% and the cost of goods sold is Rs. 75,000, then the amount of total sales will be _________.

• A. Rs. 1,00,000
• B. Rs. 93,750
• C. Rs. 92,150
• D. None of the Above

Answer 1

The correct option is A Rs. 1,00,000

This can be formulated as:

Sales - Cost of goods sold = Gross Profit

If sales is Rs.100

Then Gross Profit becomes Rs.25 (25% of sales)

Cost of Goods sold will be Rs.75 (Rs.100-Rs.25)

Cost of goods sols is equal to 75% of sales

Sales =Cost of goods sold/75%

Sales=Rs.100000