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A company earns a gross profit of 20% on cost. It credit sales are thrice its cash sales . if the credit sales are 12,00,000 , calculate the gross profit ratio of the company?
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A company earns a gross profit of 20% on cost. It credit sales are thr...
Calculating Gross Profit Ratio for a Company
Given Information:
- Gross Profit = 20% of Cost
- Credit Sales = 3 x Cash Sales
- Credit Sales = 12,00,000
Calculating Cash Sales:
- Let the Cash Sales be x
- Credit Sales = 3 x Cash Sales
- 12,00,000 = 3x
- x = 4,00,000
Therefore, Cash Sales = 4,00,000
Calculating Cost of Goods Sold:
- Let the Cost of Goods Sold be y
- Gross Profit = 20% of Cost
- Gross Profit = (Sales - Cost) / Sales
- 20% = (12,00,000 - y) / 12,00,000
- y = 9,60,000
Therefore, Cost of Goods Sold = 9,60,000
Calculating Gross Profit Ratio:
- Gross Profit Ratio = (Gross Profit / Sales) x 100%
- Gross Profit Ratio = (12,00,000 - 9,60,000) / 12,00,000 x 100%
- Gross Profit Ratio = 20%
Therefore, the Gross Profit Ratio for the given company is 20%.
Community Answer
A company earns a gross profit of 20% on cost. It credit sales are thr...
If credit sales=1200000 then cash sales=400000 revenue from operations = 1600000 assume cost of revenue from operations=x gross profit= 20% of x = 0.20x we know revenue from operations= cost of revenue from operations + gross profit 1600000=x + 0.20x 1600000= 1.20x x = 1600000÷ 1.20 x = 1333333.33 approx 1333334 gross profit = 1333334 ×20/100 =266666.8 approx 266669 gross profit ratio = gross profit /revenue from operations ×100 =266669/1600000×100 =16.666%
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A company earns a gross profit of 20% on cost. It credit sales are thrice its cash sales . if the credit sales are 12,00,000 , calculate the gross profit ratio of the company?
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A company earns a gross profit of 20% on cost. It credit sales are thrice its cash sales . if the credit sales are 12,00,000 , calculate the gross profit ratio of the company? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A company earns a gross profit of 20% on cost. It credit sales are thrice its cash sales . if the credit sales are 12,00,000 , calculate the gross profit ratio of the company? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company earns a gross profit of 20% on cost. It credit sales are thrice its cash sales . if the credit sales are 12,00,000 , calculate the gross profit ratio of the company?.
A company earns a gross profit of 20% on cost. It credit sales are thrice its cash sales . if the credit sales are 12,00,000 , calculate the gross profit ratio of the company? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A company earns a gross profit of 20% on cost. It credit sales are thrice its cash sales . if the credit sales are 12,00,000 , calculate the gross profit ratio of the company? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company earns a gross profit of 20% on cost. It credit sales are thrice its cash sales . if the credit sales are 12,00,000 , calculate the gross profit ratio of the company?.
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