Test Index

WAEC Accounting 2021 Paper

Question : 14

Total: 50

Use the following information to answer this question

Solution:

Concept:

Mark-up is gross profit expressed as a percentage of the cost of sales.

Explanation:

First, calculate the cost of sales.

Cost of sales = Opening stock + Purchases − Closing stock

Cost of sales =

60,000 + 230,000 - 40,000 = 250,000

Next, calculate the gross profit.

Gross profit = Sales − Cost of sales

Gross profit =

450,000 - 250,000 = 200,000

Now, apply the mark-up formula.

Mark-up =

\frac{\text{Gross profit}}{\text{Cost of sales}} \times 100

Mark-up =

\frac{200,000}{250,000} \times 100 = 80\%

Answer:

B. 80%

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