Mr Ojo gives you the following information on 31st July 2017
Opening Stock 7,000
Closing Stock 12,000
Purchases 60,000
Expenses 4,500
Uniform margin of 33 (frac{1}{3}) %
You are required to calculate the sales
-
A.
#55,000 -
B.
#82,500 -
C.
#27,500 -
D.
#50,000
Correct Answer: Option B
Explanation
Firstly, convert margin to mark-up i.e,
33 (frac{1}{3})%
= (frac{100}{300}={1}{3-1}={1}{2}) or 50%
Secondly, Cost of goods sold = Opening stock + Purchases – Closing Stock
C.p = 7,000 + 60,000 – 12,000
C.p = ₦55,000
Thirdly, Profit = 50% × 55,000 = ₦27,500
Therefore,
Sales = Cp + P
⇒ 55,000 + 27,500 = ₦82,500