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hasnain

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From: Chichawatni

Registered: 2014-10-13

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Percentage Profit:

Question:
The accountants of a company show sales of Rs. 12,600. The primary cost is 35% of sales and trading cost accounts for 25% of the gross profit. Gross profit is arrived at by excluding the primary cost plus the cost of advertising expenses of Rs. 1400, director's salary of Rs. 650 per annum plus 2% annual sales as miscellaneous costs. Find the percentage profit (approx) on a capital investment of Rs. 14,000?

Option A):
28%
Option B):
31%
Option C):
26%
Option D):
35%

Correct Answer is Option B):
31%

Explanation:
Primary Cost:
35% of 12600 = 4410
Miscellaneous costs:
2% of 12600 = 252
Gross Profit = 12600 - 4410 - 1400 - 650 - 252 = 5888
Trading Cost = 0.25 * 5888 = 1472
Hence, Net Profit = 4416
Percentage Profit = 4416/14000 = 31.54%.

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