fundamentals of accounting

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Querist : Anonymous

Querist : Anonymous (Querist)

06 June 2011 1. A company wishes to earn a 20% profit margin on selling price. which of the following is the profit mark up on cost, which will achieve the required profit margin?
(a) 33%
(b) 25%
(c) 20%
(d) none of the above.
(please explain in detail.)

Kumar Babu.G

Kumar Babu.G (Expert)
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06 June 2011 Answer: (c)25%

Suppose Rs.100 is Selling Price.Profit Margin is 20%.i.e., cost equals to Rs.80.Therefore for Rs. 20 profit,we have to apply 25% on Rs.80.

Querist : Anonymous

Querist : Anonymous (Querist)

09 June 2011 Sir, you send me reply for my question. Thanks for that.But I am not satisfied with your answer. (The answer given in our book is 20%.)

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