WAEC Accounting 2024 Paper

Concept:The mark-up is based on cost, while the margin is based on sales. Convert the mark-up into a margin first.Explanation:Mark-up $= \frac{1}{3}$ means profit is $1$ part for every $3$ parts of cost.So, cost $= 3$ parts and profit $= 1$ part.Therefore, sales $= \text{cost} + \text{profit} = 3 + 1 = 4$ parts.Profit margin on sales $= \frac{\text{profit}}{\text{sales}} = \frac{1}{4}$.Given sales $= \mathrm{Le}\ 180,000$.Profit $= \frac{1}{4} \times \mathrm{Le}\ 180,000 = \mathrm{Le}\ 45,000$.The stock figures given are extra information and are not needed for this calculation.Answer:Gross profit $= \mathrm{Le}\ 45,000$.Correct option: B. Le 45,000.