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Chapter 9: Question 13E (page 478)

Gross Profit Method) Each of the following gross profit percentages is expressed in terms of cost. 1. 20%. 3. 331 /3%. 2. 25%. 4. 50%. Instructions Indicate the gross profit percentage in terms of sales for each of the above.

Short Answer

Expert verified

Gross profit on sales are as follows:

(1) 16.67%

(2) 20%

(3) 25%

(4) 33.33%

Step by step solution

01

Calculation of gross profit on sales

(1) Gross profit on sales is calculated as follows:

Grossprofitonsellingprice=Percentagemarkuponcost100%+Percentagemarkuponcost=20%100%+20%=16.67%

02

Calculation of gross profit on sales

(1) Gross profit on sales is calculated as follows:

Grossprofitonsellingprice=Percentagemarkuponcost100%+Percentagemarkuponcost=25%100%+25%=20%

03

Calculation of gross profit on sales

(1) Gross profit on sales is calculated as follows:

Grossprofitonsellingprice=Percentagemarkuponcost100%+Percentagemarkuponcost=3313%100%+3313%=25%

04

Calculation of gross profit on sales

(1) Gross profit on sales is calculated as follows:

Grossprofitonsellingprice=Percentagemarkuponcost100%+Percentagemarkuponcost=50%100%+50%=33.33%

Thus, gross profit for case 1, 2, 3, and 4 equals 16.67%, 20%, 25% and 33.33% respectively.

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