FRA Margins and Mark up
SANJU
Registered Posts: 4 New contributor 🐸
Hi,
I thought I was ok on margins and Mark up but there is question on a past paper as
Task 1.8
Alex Williams has given you a closing stock figure of £24,000 at selling price. There is also a note in last year’s file stating that the sales margin is normally one third.
(a) Use this information to calculate the closing stock figure for inclusion in the final
accounts.
Answers
Task 1.8
(a) £24,000 x 2/3 = £16,000
My question is how do I apply the one third? May be it is very simple but I cannot work it out.
Speedy reply would be helpful as my exam is tomorrow!!!
Thanks
I thought I was ok on margins and Mark up but there is question on a past paper as
Task 1.8
Alex Williams has given you a closing stock figure of £24,000 at selling price. There is also a note in last year’s file stating that the sales margin is normally one third.
(a) Use this information to calculate the closing stock figure for inclusion in the final
accounts.
Answers
Task 1.8
(a) £24,000 x 2/3 = £16,000
My question is how do I apply the one third? May be it is very simple but I cannot work it out.
Speedy reply would be helpful as my exam is tomorrow!!!
Thanks
0
Comments

sales margin is a profit percentage based on selling price.
therefore if the margin is one third the stock then the cost price of the stock is 2/3 of the selling price.
therefore 24,000 x 2/3 = £16,0000 
margins
I also need help with mark up.
Test paper Dec 2005, task 1.6, closing stock valued at selling price of £22,750 excluding vat.
The mark up on these goods is 40%
Calculate the closing stock figure for inclusion in the tb?
I have looked at the previous threads & still ban't work it out...HELP0 
If the selling price is 22,750 and the markup is 40% then the goods are worth 140%, 100% of the value should be included as closing stock.
ie. 22,750/140*100 = 16,2500 
Mark Up
Sales = 100 + MUP%
Cost Of Sales = 100%
GP = MUP%
the mark up is 40%
so £22750 is 140% of the cost of the stock
so to work out the cost of the stock
22750 x 100/140 = 162500 
I finally get it!!!! thanks :001_smile:0

Thanks!
Thank you guys for the replies.
Good luck with your exams!0 
Hi the way i work it out is you know mark up relates to COGS so here is a formula that works every time. SALES 22,750 140%
COGS 40%
100%
write out what you have e.g in this case you have COGS 40%, so you know Sales wil be 140%, then remember divide what you have then x by what you want, e.g 22750/140 then x by 100 = 16250.
For margin you know it relates to sales so
SALES 100%
COGS 40%
GROSS PROFIT 60%
My little motto to remember is Marg(margin) likes to shop in the sales you know this will be 100%
For Mark up, Mark (Mark up) thinks it costs too much you know this will be 100%.
Hope I havnt confused you, but this really helps me.0 
Help  COGS? what is COGS:confused1:0

cost of goods sold.0

Ahhh stupid me  my brain hurts0

My little motto to remember is Marg(margin) likes to shop in the sales you know this will be 100%
For Mark up, Mark (Mark up) thinks it costs too much you know this will be 100%.
Hope I havnt confused you, but this really helps me.
I too like to make up little motto's but can someone explain this to me??:001_unsure:0 
there is a question in december 2005 paper askin for closing stock figure,
the closing stock was valued at selling price at £22,750 excluding VAT. the markup on these goods is 40%
calculate closing stock figure for inclusion in the the trial balance.
i have checked da answer and it is £22,750/1.4 = £16,250
i have no idea how to do dis question.... plz some one help me on this question0 
Hi see Kathleen, explantions it will help you to understand to do the question.0

thanks snaju, got it
but not logically i have remembered it 4 2morow
good luck 4 tommorrow0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 12.5K For AAT students
 318 NEW! Qualifications 2022
 161 General Qualifications 2022 discussion
 11 AAT Level 2 Certificate in Accounting
 56 AAT Level 3 Diploma in Accounting
 87 AAT Level 4 Diploma in Professional Accounting
 8.8K For accounting professionals
 23 coronavirus (Covid19)
 272 VAT
 92 Software
 273 Tax
 135 Bookkeeping
 7.2K General accounting discussion
 200 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 345 Feedback for AAT
 2.8K Chat and offtopic discussion
 582 Job postings
 16 Who can benefit from AAT?
 36 Where can AAT take me?
 42 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 66 AAT membership