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Opening Stock - $25000
Closing Stock - $50000
Gross profit ratio :25% on sales
Purchases+Manu. Exp : $325,000
A. $300,000
B. $375,000
C. $400,000
D. $450,000
Sales is $400,000. Option C.
Sales 400,000 100%
COGS 300,000 75%
GP 100,000 25%
or $300,000/75% = $400,000
Opening $ 25,000
Purchases 325,000
Avail. for Sale 350,000
Closing 50,000
COGS 300,000
C. $400,000
Profit ratio to sales was25% hence margin to markup since we have cost of sales value of $300,000. The ratio for gross profit will be0.333 thus25/75 multiply by $300,000 will be $99,999.99 approximately $100,000. Hence total sales figure for us to get profit of25% margin ($100,000) is $400,000 ($300,000 + $100,000).
Note margin to mark up we deduct the margin percentage given from the denominator of100% and mark up to margin we add.
The sales would be C. $400,000...
C. $400,000 is correct amount of sales
THE SALES IS400000 I.E OPTION C.....................
C) $400000
i.e. COGS + GP =300000 +100000 =400000
Correct answer is A. $300,000
