margins!!
evil edna
Registered Posts: 5 New contributor 🐸
Just doing the december 07 test in prep for wednesday FRA. question 1.6 has got me - just can't get my head round margin & mark up, got a mental block there.
question is: 'closing stock valued at selling price at £22,750 excl vat. Mark up on goods is 40%, calculate closing stock figure?'
answer is: 22,750/1.4=£16,250
Can anyone elaborate for me please??
question is: 'closing stock valued at selling price at £22,750 excl vat. Mark up on goods is 40%, calculate closing stock figure?'
answer is: 22,750/1.4=£16,250
Can anyone elaborate for me please??
0
Comments
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I mean december 050
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Hi,
It is a shortened version of:
22750/140 (100%+40% mark up)=162.5 (1%)
162.5*100= 16250 (100%)
In this way you know it cost you £16250
And to double check
16250*40%=6500
6500+16250=22750
Hope that helps, as my explainations are pretty rubbish (they work in my head!):001_unsure:
H.0 -
Everyones got a different way of working these things. I'll show you the method I use:
Gross Profit Mark Up = Gross Profit/Cost of Sales x 100
= (Sales - Cost of Sales)/Cost of Sales x 100
so
(22750-c)/c x 100 = 40 where c is cost of sales
(22750-c)/c = 40/100 = 0.4
22750-c = 0.4c
22750 = c + 0.4c = 1.4c
so c = 22750/1.4 = £16250 which is the closing stock figure at cost price.0 -
I have just replied about this question at 2.31 to sanju, take a look, hope it helps0
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thanks for your help! think its sinking in..tomorrow will be the test!! good luck to eveyone doing FRA tomorrow!!!!!!!! :scared:0
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