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WAEC SSCE - Financial Accounting - 1991 (Objective)

Question 1 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Manufacturing cost of finished goods} & 75,000 \\ \text{Mark-up is 25%} & 5,000 \end{array}\)
The gross profit for the year is
Answer Details
The manufacturing cost of finished goods is given as N75,000. The mark-up is 25%, which means that the selling price is 125% of the manufacturing cost (100% + 25% = 125%). So, the selling price of the finished goods is 125% of N75,000, which is: 125/100 x N75,000 = N93,750 The gross profit is the difference between the selling price and the manufacturing cost, which is: N93,750 - N75,000 = N18,750 Therefore, the gross profit for the year is N18,750. , N18,750, is the correct answer.
Read lesson note on Manufacturing Accounts (JAMB)
Read lesson note on Nature And Significance Of Accounting (JAMB)
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