Help needed! Management Accounting Decision and Control Trade Payables Payment Period
ggp25
Registered Posts: 3 New contributor 🐸
Can someone please help on the below?
The company has a trade payables payment period of 70 days, based on average trade payables of £460,274
Prices are set up using a markup on cost of one third,
Selling costs are 4% of sales and admin costs are 3.5% of sales
Net assets are £4,000,000
Can someone confirm how to calculate:
Sales
Cost of Sales
Gross Profit
Selling costs
Admin costs
Net profit
The company has a trade payables payment period of 70 days, based on average trade payables of £460,274
Prices are set up using a markup on cost of one third,
Selling costs are 4% of sales and admin costs are 3.5% of sales
Net assets are £4,000,000
Can someone confirm how to calculate:
Sales
Cost of Sales
Gross Profit
Selling costs
Admin costs
Net profit
0
Answers

Hello,
First figure you can calculate is Cost of Sales £ 460,274 / 70 * 365 = 2,400,000
Then use this to complete the other missing figures:
Sales 3,200,000 (2,400,000 + 1/3 Mark up on cost)
Cost of Sales (2,400,000)
Gross Profit 800,000
Selling Costs (128,000)
Admin Costs (112,000)
Net Profit 560,000
Hope this is correct / helpful
0 
I would first go with what I have been given easily, which is calculating the Payables period
Payables/COS X 365 days = 70 days
Then do the maths to get 2,400,000
Sales are marked up by 1/3
Therefore 1.33*2400000=3192000
GP= 31920002400000=792000
Selling costs
4% of 3192000=127680
Admin costs
3.5% of 3192000= 111720
Net profit =792000127680111720
= 552600
Please confirm for me on the answers0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 18.9K For AAT students
 234 NEW! Qualifications 2022
 133 General Qualifications 2022 discussion
 7 AAT Level 2 Certificate in Accounting
 31 AAT Level 3 Diploma in Accounting
 55 AAT Level 4 Diploma in Professional Accounting
 8.9K For accounting professionals
 23 coronavirus (Covid19)
 272 VAT
 91 Software
 272 Tax
 135 Bookkeeping
 7.3K General accounting discussion
 201 AAT member discussion (AATQB, MAAT, FMAAT and AAT Licensed Accountants and Bookkeepers)
 3.8K For everyone
 39 AAT news and announcements
 352 Feedback for AAT
 2.8K Chat and offtopic discussion
 586 Job postings
 17 Who can benefit from AAT?
 36 Where can AAT take me?
 44 Getting started with AAT
 26 Finding an AAT training provider
 47 Distance learning and other ways to study AAT
 25 Apprenticeships
 65 AAT membership