Calculation of Loading on Consignment Goods

Given Information:
- Cost of goods sent on consignment = Rs 120,000
- Gross margin on invoice price = 20%

Calculation of Invoice Price:
Gross margin on invoice price = (Invoice Price - Cost Price) / Invoice Price * 100%
20% = (Invoice Price - Rs 120,000) / Invoice Price * 100%
20% * Invoice Price = Invoice Price - Rs 120,000
20% * Invoice Price - Invoice Price = -Rs 120,000
Invoice Price - 20% * Invoice Price = Rs 150,000
0.8 * Invoice Price = Rs 150,000
Invoice Price = Rs 187,500

Calculation of Loading:
Loading = Invoice Price - Cost Price
Loading = Rs 187,500 - Rs 120,000
Loading = Rs 67,500

Explanation:
- Loading on consignment goods refers to the additional amount added to the cost price to arrive at the invoice price.
- In this case, the given information states that the goods are invoiced to give a gross margin of 20% on the invoice price.
- Using this information, we can calculate the invoice price by equating the gross margin formula to 20% and solving for the invoice price.
- Once we have the invoice price, we can calculate the loading by subtracting the cost price from the invoice price.
- In this case, the loading is calculated to be Rs 67,500.
- Loading is an important factor to consider in consignment transactions as it affects the profitability of both the consignor and the consignee.

If good sent on consignment is r.s 120,000 at a invoice price of 20% on such invoice price then it's loading would be


120,000 ×100/80 = 150,000

Total loading = 150,000 less 120,000 = 30,000