If the rate of Gross Profit is 25 % of sales, and Cost of Goods Sold is Rs.100000/-, the amount of…
Gross profit is 25% of sales, so cost of goods sold is 75% of sales. Gross profit = 100000 × 25/75 = ₹100000/3 = approximately ₹33,333; applying 25% directly to cost would…
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If the rate of Gross Profit is 25 % of sales, and Cost of Goods Sold is Rs.100000/-, the amount of Gross Profit will be approximately:
Answer and explanation
Correct answer B
Gross profit is 25% of sales, so cost of goods sold is 75% of sales. Gross profit = 100000 × 25/75 = ₹100000/3 = approximately ₹33,333; applying 25% directly to cost would use the wrong base.
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Kerala SET (LBS Centre)