Question

If the rate of gross profit on the sale is 20% and cost of goods sold is Rs. 1,00,000, then the amount of gross profit will be equal to:

• A. Rs 20,000
• B. Rs 25,000
• C. Rs 35,000
• D. Rs 15,000

Answer 1

The correct option is B

Rs 25,000

$\begin{array}{ccc}\text{sales}& 100& \\ \text{Profit}& 20& \left(20\%\text{on sales}\right)\\ \text{Cost of goods sold}& 80& \end{array}$

Gross profit = $1,00,000\times \frac{20}{80}$ = Rs 25,000