Help on Mark-Up

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
Admin Cost
Net Profit


Gross Profit Margin %
Net Profit Margin %
RONA %

Comments

  • Resmi
    Resmi Registered Posts: 2
    Hi where did you get this question from . Do you know how to answer this
  • dumutroba
    dumutroba Registered Posts: 262
    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
    Admin cost
    22573284x3.2%=722345.08
    Net Profit
    GP - selling+admin cost=3792311.80

    For the ratios you just fill in the formula with the above
    AAT Level 2. 2018 Distinction
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  • RyanP123
    RyanP123 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
  • sophie_612
    sophie_612 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?
  • PeterC
    PeterC Registered, Tutor Posts: 245 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
  • RyanP123
    RyanP123 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
    admin costs
    net profit

    Sales - £2,117,000
    Cost of Sales - £1,587,750
    Gross Profit - £529,250
    Selling Cost - £105,850
    Admin Costs - £67,744
    Net Profit - £355,656


    Could someone confirm if the figures shoved are correct please. Thanks
  • PeterC
    PeterC Registered, Tutor Posts: 245 Dedicated contributor 🦉
    Sales Revenue = Cost of Sales + 25% ie.: Cost of Sales x 1.25
    Cost of Sales = Sales Revenue/1.25 = 2,117,000/1.25 = £1,693,600
  • RyanP123
    RyanP123 Registered Posts: 5 New contributor 🐸
    Thanks Peter. That’s what I thought but I got in a pickle right at the last moment and changed my answer to what I put above. I think I would have failed now. Thanks
  • RyanP123
    RyanP123 Registered Posts: 5 New contributor 🐸
    Hi Peter, is it possible do you think to pass the decision and control exam if I struggle with the written task questions and this question 6?
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