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WAEC Financial Accounting 1991 (August) Question 28

Question 28

Incomplete Records

Manufacturing cost of finished goods: ₦75,000
Selling and distribution expenses: ₦5,000
Mark-up is 25%

The gross profit for the year is

  1. A.₦93,750
  2. B.₦56,250
  3. C.₦18,750
  4. D.₦17,500
  5. E.₦13,750
Show the answer and explanation

Answer: C (₦18,750)

Explanation

Mark-up 25% on cost: 25% × 75,000 = ₦18,750.