Confused! Please help!!

Hi,

I'm doing final accounts prep using Kaplan's book and i'm confused. I've done this calculation for the cost structure and I've got £80,540. However the Kaplan book says this should be £80,560. This is the question:

Calculate Total Sales:
Markup on Cost of Goods is 33 1/3%.
Cost of Goods is £60,420.

In my mind, this means revenue = 133.3%. So I divided £60,420 by 100, then times that figure by 133.3%.

Am I wrong?

Thanks

Comments

  • Adele69Adele69 CambridgePosts: 320AAT Student
    i've never owned a Kaplan book so can't comment if they are riddled with typo errors as the Osbourne and BPP books/tutor support, very frustrating if you spend a long time reworking answers... your 80560 is correct as far as i can tell.

    markup as suggested is 'adding on' to the figure you have
    so Cost of Sales 60420 is your base 100% and the markup is 33.3%
    multiply 60420 by 1.33 and you will get the profit figure 80560
    (you really don't need to get 1% and multiply it up)

    the other way around if starting from the profit figure 80560
    that is the base 100% figure
    60420 / 80560 = 0.75 suggesting there is a 25% profit margin
  • BertieBertie West Midlands Posts: 376Registered
    edited March 2017
    The answer is £80560

    33 1/3 is 33.333333333333333...and so forth

    So, £60,420 x 1.33333333333... (rounded) is - £80,560.

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