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WAEC Accounting 2023 Paper

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Question : 41

Total: 50

If sales is D 12,000 and the gross profit mark -up percentage is 25%. What is the cost of sales?

D 2,400
D 9,000
D 9,600
D 3,000

Solution:

Concept:

Mark-up is always calculated on the cost of sales, not on the selling price.

Explanation:

Let the cost of sales be

C

.

Gross profit mark-up is

25\%

of cost, so gross profit

=0.25C

.

Sales

=

Cost of Sales

+

Gross Profit.

Therefore,

\mathrm{D}12{,}000 = C + 0.25C = 1.25C

.

Solving for

C

:

C = \frac{\mathrm{D}12{,}000}{1.25}

.

C = \mathrm{D}9{,}600

.

Thus, the cost of sales is

\mathrm{D}9{,}600

.

Answer:

C.

\mathrm{D}9{,}600

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