Test Index

WAEC Accounting 2024 Paper

© africaexams.com

Question : 7

Total: 50

Use the following information to answer this question

Le 139,200.
Le 135,000.
Le 133,200.
Le 127,200.

Solution:

Concept:

Mark-up is profit as a fraction of cost of sales, while margin is profit as a fraction of sales.

Explanation:

Given mark-up

= \frac{1}{3}

, profit is

\frac{1}{3}

of cost of sales.

Therefore, margin

= \frac{\text{profit}}{\text{cost of sales} + \text{profit}} = \frac{1}{3+1} = \frac{1}{4}

.

Since sales

= \text{Le }180,000

, we have:

\frac{1}{4} = \frac{\text{profit}}{180,000}

\text{Profit} = \frac{180,000}{4} = \text{Le }45,000

Cost of sales

=

Sales

-

Profit

= 180,000 - 45,000 = \text{Le }135,000

.

Now use: Cost of sales

=

Opening stock

+

Purchases

-

Closing stock.

135,000 = 6,000 + \text{Purchases} - 4,200

\text{Purchases} = 135,000 + 4,200 - 6,000 = \text{Le }133,200

Answer:

C. Le 133,200.

© africaexams.com

Go to Question:

Prev Question

Next Question