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Find out the Profit Amount ? Cost of Sales : 10 Profit : 20 % of Sales Ans: A: 2.0 B:2.5 C:1.67 D:3.0

It's only for knowledge Sharing, if any wrong in question please let me know.

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Question ajoutée par ABDUL VAHAB MANADI , Financial Controller (F&B Experience) , Abu Dhabi National Hotels Compass ME LLC
Date de publication: 2013/12/03
Rehan Qureshi
par Rehan Qureshi , Financial Consultant , Self Employeed

must be Option B i.e.2.5

Kaleem-ur-Rehman Rana
par Kaleem-ur-Rehman Rana , Finance Executive , Open D Group (ODG)

Option-B,2.5 is a correct answer.

As this is margin, margin is always calculated on sales and in calculating margin sales is always considered as100%.

 

Sales = Cost + Profit

X =10 + (20% * X)

X =10 +0.2X

X -0.2X =10

X (1 -0.2) =10

0.8X =10

X =10/0.8

X =12.5

Sales is12.5, as profit is20% of sales

Profit =20% of12.5

 

Profit =2.5

Khaled Abdelrehim ACCA DipIFR CMA
par Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

2.5 andswer is B

Menerva Melad
par Menerva Melad , Account Executive, Key Accounts , Graphic Home Company

is

B:2.5

suleman anjum
par suleman anjum , Accounts and Finance Executive , Paksolarcells Pvt. ltd

B2.5

Ahmed Abdi Mahad
par Ahmed Abdi Mahad , Director of Internal Auditing Directorate , Jigjiga University

Given cost of sales ......... $10 profit % .....................20% of sales Required Profit amount? solution: It is simple to find the sales amount from the given data. it is apparent that the percentage f the cost of sales is equal to80% of sales and it also apparent that the sales amount is equal to $10 ÷80% = $12.5 Then the required profit amount is $2.5 ($12.5 - $10 = $2.5) So choice B, is the answer for your question

Muhammad Afaq
par Muhammad Afaq , SENIOR FINANCIAL ACCOUNTANT , United Eddy Company (United Yousef M. Naghi Group)

To determine the Profit Amount, I will calculate the sales price, which is as follow

 

Sales price =       cost of sales +cost of sales * profit margin

Sales price=       10+(10*.2)

Sales price=       10+2

Sales Price=       12

 

 

Hence Profit Amount is2 (=12-10)

 

Note: it is little bit tricky question

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