Question :
If stock turnover ratio = 6 times; Average stock = Rs.8,000; Selling price = 25% above cost. What is the amount of gross profit?
Option 1: Rs.4,000
Option 2: Rs.2,000
Option 3: Rs.12,000
Option 4: Rs.10,000
Answer (1)
19th Jan, 2024
Correct Answer: Rs.12,000
Solution :
Stock turnover ratio = Cost of goods sold/Average inventory
6 = Cost of goods sold/ 8000
Cost of goods sold = Rs.48000
Selling price = 25 % above cost
Therefore Gross profit = Cost of goods sold x 25%
= 48000 x 25%
= Rs.12,000
Hence the correct answer is option 3.
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