A. 1,600

**B. 1,500**

C. 1,000

D. 1,800

Updated by: **Mohammad Ejaz**

Total Sales value =2000

Gross Profit =25 % of Sales

= 25/100×2000

= 500 Gross Profit

Cost of Goods = Total Sales – Gross Profit

=2000-500 = 1500

### Related Mcqs:

- Budgeted sales for the next year is 5,00,000 units. Desired ending finished goods inventory is 1,50,000 units and equivalent units in ending W-I-P inventory is 60,000 units. The opening finished goods inventory for the next year is 80,000 units, with 50,000 equivalent units in beginning W-I-P inventory How many equivalent units should be produced?
**A. 5,80,000**

B. 5,50,000

C. 5,00,000

D. 5,75,000 - Find the value of opening stock from the following data. Purchases 1,50,000, Closing stock 30,000 Sales 2,20,000, Gross profit 40,000.
A. 50,000

B. 55,000

**C. 60,000**

D. 65,000 - A company is currently operating at 80% capacity level. The production under normal capacity level is 1,50,000 units. The variable cost per unit is ` 14 and the total fixed costs are ` 8,00,000. If the company wants to earn a profit of ` 4,00,000, then the price of the product per unit should be
A. 37.50

B. 38.25

**C. 24.00**

D. 35.00 - A second hand car is purchased for 2,00,000 and sold at 1,40,000 after two years. If depreciation is charged @ 10% on SLM method, find the profit or loss on sale of the car?
**A. 20,000 Loss**

B. 20,000 Profit

C. 10,000 Loss

D. 10,000 Profit - A second hand car is purchased for 2,00,000 and sold at 1,40,000 after two years. If depreciation is charged @ 10% on written down value method, find the profit or loss on sale of the Second hand car?
A. Loss of 20,000

**B. Loss of 22,000**

C. Loss of 11,000

D. Profit of 11,000 - For the past 3 years, DK Ltd. has failed to accrue unpaid wages earned by workers during the last week of the year. The amounts omitted, which were considered material, were as follows:

March 31,2010 – ` 56,000

March 31, 2011 – ` 51,000

March 31, 2012 – ` 64,000

The entry on March 31, 2012 to rectify these omissions would include aA. Credit to wage expense for ` 64,000

B. Debit to wage expense for ` 64,000

C. Debit to wage expense for ` 51,000

**D. Debit to wage expense for ` 13,000** - A Ltd. Has sales of 2,200, total fixed cost of 570, variable cost of 1,540, raw material consumed of ` 1,100, number of units sold 22,000. What shall be the BEP 9 in units) if raw material price is reduced by 2%?
**A. 18,387**

B. 18,560

C. 18,750

D. 19,000 - Sundry debtors as per Trial Balance is 43,000 which includes 2,200 due from ‗H in respect of goods sent to him on approval basis, the cost price of which is 1,800. Rectification would involve:
A. Adding 2,200 to closing stock

B. Deducting 1,800 from closing stock and deducting 2,200 each from debtors and sales

**C. Adding 1,800 to closing stock and deducting 2,200 each from debtors and sales**

D. Deducting 1,800 from debtors - Cost of goods sold excludes___________?
A. Opening Stock

B. Carriage inward

C. Wages & Salary

**D. Postage & Stamps** - The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by
A. 17,000 (overstated.

B. 12,000 (understated.

**C. 7,000 (overstated.**

D. 7,000 (understated.

## 22 Comments

Total Sales value =2000

Gross Profit =25 % of Sales

= 25/100×2000

= 500 Gross Profit

Cost of Goods = Total Sales – Gross Profit

=2000-500 = 1500

hence the Right option is B

thanks for explanation

If Profit is on cost of sales then

Cost = 100%

Profit=25%

Sales=Cost+ Gross profit

125%=100%+25%

So Cost of Sale is

=2000×100/125

=1600

as base is cost so it should be 100%

A is the right option

Sir 25% profit is on cost not on sale, your calculation is not correct with respect to question statement.

Explanation:

25% on cost=25/125×2000 is 400.

Cost of sold= 2000-400 is 1600.

2000 × 100/125= 1600 here profit is 25% on cost

For 25% profit for 2000 sale

It results 1500

thanks for correction

is it 25% on sale or cost????

1500 is wrong answer

Correct is 1600

Actually 2000 have 100% of cost of goods sold and 25% profit. So

2000÷1.25 = 1600 or 2000÷125×100= 1600 CGS

Reverse calculation

1600×25%= 400 Gross profit

Or 25/125×2000= 400 Gross profit

kindly explain it, how cost 1600 Rs.???

now updated

Correct Answer is 1600!

25/125*2000=400

2000-400=1600

=1600*25%=400

=1600+400=2000

if 25% profit on cost price then correct answer is 1600

if 25% profit on sale price then correct answer is 1500

If cost is 100

Profit. 25

Sale. 125

If sale 125 than cost will be 100

If sale is 1 than cost will be 100/125

If sale is 2000 than cost will be 100/125*200= 1600

answer is 1600

because 25%profit is on cost not on sales price

it means sales price = cost +25%of cost

2000=125%of cost =125/100 of cost

cost=2000×100/125

cost=1600answer

check: profit 25% of cost=400

400+1600=2000(sales price)

on the other hand according to your answer 1500×25%=375

and 375+1500=1875 wrong sales price

Answer will be A-1600. As the profit of 25% is on the cost amount and not the price. Adding 400 which is the 25% of 1600(cost) makes the final price 2000(Cost+Profit).

I think 1600 was the right answer as it was given that profit is 25% of cost not selling price. If profit is 25% of cost this makes cost as base in full 100% plus mark up of 25%.

Hence Selling price= Cost + profit

125%=100%+25%

Applying formula

(Given data/ratio of given data) *ratio of desired data

2000(sp)/125(sp percentage) *100(ratio of desired data-cost)

the right answer is 1600

( 2000 ) 100/125 = 1600

25% of 1600 is 400

1600 + 400 = 2000

your answer is not correct because profit on cost not on sale

If the profit on sale then answer is 1500 but in Question profit on cost ,so correct answer is 1600.

sale= cost+profit

2000=x+.25x

2000=1.25x

2000/1.25=x

1600=x

is it 25% on sale or cost????