A business operates on a mark-up of 25%. If cost of goods sold is N800,000. What is the profit?
Answer Details
To find the profit, we need to first calculate the selling price, which is the cost price plus the mark-up.
Mark-up is calculated as a percentage of the cost price, and in this case, it is 25%. So, the mark-up on N800,000 is:
25/100 * N800,000 = N200,000
Therefore, the selling price of the goods is:
N800,000 + N200,000 = N1,000,000
To calculate the profit, we need to subtract the cost of goods sold from the selling price:
N1,000,000 - N800,000 = N200,000
Therefore, the profit is N200,000.
The answer is option B: N200,000.