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Super Profit Method

profit = Aver...

Question

profit = Average profit - Normal profit

Gross

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Super

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Abnormal

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Net

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Solution

The correct option is B Super
Super Profit = Average Profit – Normal Profit.

Average profit = Total profits of all or agreed years/Number of years

Normal profit = Capital employed x Normal rate of return/100

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= \frac{3, 60, 000}{3} = R s . 1, 20, 000

= R s . . . . \times \frac{15}{100} = R s . . . .

=

-

= R s . 1, 20, 000 - R s . . . . = R s . . .

=

\times

Weighted Average Profit =

Normal Profits =

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