The net profit for departmental A is

Use the question to answer this question:

Opening stock ₦
Department
A
B

100
800
Purchases:
A
B
Wages of workers
Salaries

1500
2000
50
100
Sales
A
B

3000
5000

Expenses are to be shared in the ratio of sales.

The net profit for departmental A is

  • A.
    1880
  • B.
    1600
  • C.
    880
  • D.
    425
Correct Answer: Option D
Explanation

Cost of goods sold for departmental = 1000 + 1500 = 2,500
Gross profit = Sales – Cost of goods sold
3000 – 2500
⇒ ₦500
Therefore, Net profit = Gross profit – Expenses
500 – (50 ÷ 2 + 100 ÷ 2)
500 – (25 + 50)
500 – 75
Net profit = ₦425

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