Question 24
Incomplete RecordsI. A retailer when fixing his selling price adds one-quarter to the cost of the article
II. The expenses of the retailer is 10% of his sales
III. The total sales is ₦23 000
IV. He turned over his stock five times in the year.
Compute the average amount of stock in hand at cost price
- A.₦3 860
- B.₦3 806
- C.₦3 680
- D.₦3 086
Show the answer and explanation
Answer: C (₦3 680)
Explanation
Mark-up of 1/4 on cost means cost = 4/5 of sales: 23 000 × 4/5 = ₦18 400. Average stock = cost of sales ÷ turnover = 18 400 ÷ 5 = ₦3 680.