Use the following information to answer this question The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30t...
Use the following information to answer this question
The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30th June, 19x8
₦
₦
Sales
Less: cost of goods sold
233,000
170,000
63,000
less: Overhead Expenses
Admin expenses
Selling expenses
Other overhead expenses
16,800
15,000
6,200
Net profit
25,000
Calculate the net profit on percentage of expenses.
Answer Details
To calculate the net profit as a percentage of expenses, we need to first determine the total expenses of the company for the year. We can do this by adding up all of the overhead expenses: admin expenses + selling expenses + other overhead expenses.
Total expenses = ₦16,800 + ₦15,000 + ₦6,200 = ₦38,000
Next, we can calculate the net profit as a percentage of expenses by dividing the net profit by the total expenses and multiplying by 100.
Net profit as a percentage of expenses = (Net profit / Total expenses) x 100
= (₦25,000 / ₦38,000) x 100
= 65.79%
Therefore, the correct answer is 65.79%, which is option (D). This means that for every ₦1 spent on expenses, the company earned a net profit of approximately ₦0.66. It's important to note that this percentage does not take into account the cost of goods sold, which is a separate expense and is already deducted from the sales figure.