# Help on Mark-Up

Registered Posts: 5
Apologies, i realise my last post looked posted weird.
Could anyone help me with how i answer with question? Thank you in advance.

Receivables days are 52, Receivables are £3215920, these prices are on a mark-up of 25%, Selling cost is 5% of sales, Admin cost are 3.2% of sales, net assets are £1452500. There is 365 days in the year

Sales
COS
Gross Profit
Selling Cost
Net Profit

Gross Profit Margin %
Net Profit Margin %
RONA %

• Registered Posts: 2
Hi where did you get this question from . Do you know how to answer this
• AAT Student, AATQB Posts: 264
Sales
3215920x365/52=22573284
COS
Mark up(gross profit) + COS = sales
25%+75%=100%
22573284/100%x75%=16929963
GP
22573284/100%x25%=5643321
Selling cost
22573284x5%=1128664.20
22573284x3.2%=722345.08
Net Profit

For the ratios you just fill in the formula with the above
AAT Level 2. 2018 Distinction
AAT Level 3. 2018 Distinction
AAT Level 4. 2019 FSLC 100% MABU 93% MADC 82% PDSY 80%
• Registered Posts: 5 New contributor 🐸
Hi Sammy, could you confirm where you got this question from please as had a similar one on my decision and control exam yesterday. Thanks
• Registered Posts: 136 Dedicated contributor 🌟 🐵 🌟
please can someone confirm the above working is correct? as in the aat samples it shows inventory holding instead of receivables and they work out cos and sales differently?
• Registered, Tutor Posts: 243 Dedicated contributor 🌟 🐵 🌟
I agree with the Sales figure, although I actually make it £22,573,285

COS + Markup = Sales
COS + (COS x 25%) = Sales
COS x 1.25 = Sales
COS = Sales/1.25 = 22.573.285/1.25 = £18,058,628

The rest is probably straightforward
• Registered Posts: 5 New contributor 🐸
Herta is a division of a large company.Herta has a trade receivable collection period of 52days,average trade receivable of 301 600 pounds.Price are set using a mark up cost of 25%.Selling cost are 5% of sales and administration cost are 3.2% of sales.Net asset are 1452500 pounds.There are 365 days in a year.

Calculate,

sales
cost of sales
Gross profit
selling costs
net profit

Sales - £2,117,000
Cost of Sales - £1,587,750
Gross Profit - £529,250
Selling Cost - £105,850