CA Foundation Exam > CA Foundation Questions > A Company wishes to earn a 20% profit margin ...
Start Learning for Free
A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?
- a)33%
- b)25%
- c)20%
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
A Company wishes to earn a 20% profit margin on selling price. Which o...
Most Upvoted Answer
A Company wishes to earn a 20% profit margin on selling price. Which o...
Profit Margin on Selling Price:
The profit margin on selling price is the percentage of profit earned on the selling price of a product. It is calculated by dividing the profit by the selling price and multiplying by 100.
Profit Margin on Selling Price Formula:
Profit Margin on Selling Price = (Profit / Selling Price) * 100
Profit Margin on Selling Price Requirement:
In this question, the company wishes to earn a 20% profit margin on the selling price.
Profit Mark Up on Cost:
The profit mark up on cost is the percentage of profit earned on the cost of a product. It is calculated by dividing the profit by the cost and multiplying by 100.
Profit Mark Up on Cost Formula:
Profit Mark Up on Cost = (Profit / Cost) * 100
Relationship between Profit Margin on Selling Price and Profit Mark Up on Cost:
There is a relationship between the profit margin on selling price and the profit mark up on cost. This relationship can be determined by using the following formula:
Profit Margin on Selling Price = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost)) * 100
This formula helps us convert the profit mark up on cost to the profit margin on selling price.
Calculation:
Let's calculate the profit mark up on cost that will achieve the required profit margin of 20% on the selling price.
Profit Margin on Selling Price = 20%
Profit Margin on Selling Price = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost)) * 100
20% = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost)) * 100
20% = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost))
0.2 = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost))
0.2(1 + Profit Mark Up on Cost) = Profit Mark Up on Cost
0.2 + 0.2 * Profit Mark Up on Cost = Profit Mark Up on Cost
0.2 = 0.8 * Profit Mark Up on Cost
Profit Mark Up on Cost = 0.2 / 0.8
Profit Mark Up on Cost = 0.25
Therefore, the profit mark up on cost that will achieve the required profit margin of 20% on the selling price is 25%. Hence, option B is the correct answer.
The profit margin on selling price is the percentage of profit earned on the selling price of a product. It is calculated by dividing the profit by the selling price and multiplying by 100.
Profit Margin on Selling Price Formula:
Profit Margin on Selling Price = (Profit / Selling Price) * 100
Profit Margin on Selling Price Requirement:
In this question, the company wishes to earn a 20% profit margin on the selling price.
Profit Mark Up on Cost:
The profit mark up on cost is the percentage of profit earned on the cost of a product. It is calculated by dividing the profit by the cost and multiplying by 100.
Profit Mark Up on Cost Formula:
Profit Mark Up on Cost = (Profit / Cost) * 100
Relationship between Profit Margin on Selling Price and Profit Mark Up on Cost:
There is a relationship between the profit margin on selling price and the profit mark up on cost. This relationship can be determined by using the following formula:
Profit Margin on Selling Price = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost)) * 100
This formula helps us convert the profit mark up on cost to the profit margin on selling price.
Calculation:
Let's calculate the profit mark up on cost that will achieve the required profit margin of 20% on the selling price.
Profit Margin on Selling Price = 20%
Profit Margin on Selling Price = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost)) * 100
20% = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost)) * 100
20% = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost))
0.2 = (Profit Mark Up on Cost / (1 + Profit Mark Up on Cost))
0.2(1 + Profit Mark Up on Cost) = Profit Mark Up on Cost
0.2 + 0.2 * Profit Mark Up on Cost = Profit Mark Up on Cost
0.2 = 0.8 * Profit Mark Up on Cost
Profit Mark Up on Cost = 0.2 / 0.8
Profit Mark Up on Cost = 0.25
Therefore, the profit mark up on cost that will achieve the required profit margin of 20% on the selling price is 25%. Hence, option B is the correct answer.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Top Courses for CA FoundationView all
A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer?
Question Description
A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer?.
A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer?.
Solutions for A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?a)33%b)25%c)20%d)None of the aboveCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup