LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Logically problem

amit pachauri (student) (24 Points)

15 April 2015

if profit is 33.33% on cost on sales is 25% iquesatin is (33.33/133.33)*100 problem is that what is the logic to do that

Reply
Follow
Share

11 Replies

CA Raj Doshi (Practising CA) (8723 Points)
Replied 16 April 2015

Since g p ratio is expressed as ratio of profit to sales ( and not cost of sales ).

ashok bhatt (ca student) (89 Points)
Replied 16 April 2015

this is a great confusion for me too kindly tell in a simple form as if profit on sales is 25 percent what should br the cost price and vice versa

Nitish Agrawal (CA) (810 Points)
Replied 16 April 2015

Agar % cost me diya h na to sales m nikalne k liye denominater m 100 + given % and agr %sales m diya h and cost m nikalna h to denominater m 100- given %...see the query example for clarity...

Anubhav (Student) (589 Points)
Replied 16 April 2015

Pardon me if I did not understand your query but if you are having problem in ratio structure, look at it this way,

Sell price = Cost + Profit

Cost =100

Profit = 33

So Sales Value will be 133

Now in this 133, Cost part is 100/133 and profit part is 33/133

The percentage value of profit from 33.33% to 25% changes because of change in the main value on which it is based.

Profit remains same in value but changes when percentage values are concerned

so Profit = 33/100 i.e.33%while you calculate it on cost and it is 33/133 i.e. 25% when you calculate it on Sales.

You can also use equation to derive the same thing,

Say Let us say Cost is x

then profit will be .33x,

now sales value = x + .33x

Thus sales value is 1.33 x that is 1.33 times of x

Now out of this 1.33x, .33 x is profit so by dividing

.33x by 1.33x you will get 25%

Using this in an example,

Say Cost is Rs.8 and profit is Rs.2

So sales value is Rs.10 (Since Cost + profit = Sell Price)

Now profit is 2/8 i.e. 25 % of Cost but it is

2/10 i.e. 20% of Sales.

what if profit on sales is given, then how to find profit on sales

Say profit on sales is 10 % & you have to find profit on cost then

sales = cost + profit

100% = x + 10/100 and cost is remaining part of 100 i.e. 90/100.

These are alternative methods to understand one single thing and must be practised one by one to get a grasp on logic.

2 Like

ashok bhatt (ca student) (89 Points)
Replied 17 April 2015

DEAR ANUBHA, LET ME FIRST THANK YOU FOR YOUR INITIATIVE TO GET ME OUT OF THIS CONFUSION.

COULD YOU KINDLY SEND ME SOME EXAMPLES ABOUT MATERIAL MANAGMENT IN OUR COSTIN SUBJECT THANKS

Anubhav (Student) (589 Points)
Replied 18 April 2015

I am not sure I have any such resources with me currently...but you can make a request in general forum

Naveen (nil) (21 Points)
Replied 19 April 2015

Profit on 33.33% on cost means cost should taken as 100 that is

Cost - 100

Profit – 33.33 (1/3)

Sales - 133.33 (1/4)

That means 33.33% = 1/3 on cost (33.33/100) is 25% = 1/4 on sales (33.33/133.33)

Further example Cost - Rs 500 = 100%

Profit – Rs 166.65 = 33.33%

Sales – Rs 666.665 = 133.33%

166.65 profit * 133.33% = Sales 166.65 profit * 100 = cost

On 33.33% 33.33%

Suppose it says 33.33 on sales, sales should be taken as 100

Sales - 100%

Profit - 33.33%

Cost - 66.66%

Here 33.33% =1/3 on sales (33.33/100) is 66.66% = 2/3 on cost

sumit dave (noen) (43 Points)
Replied 26 April 2015

even i never und this logics...but i have simple method for you... when it is cost plus % its very easy.. when its percentage on sales is say 20% this means your cost is 80% divide cost by 80% and you get the sales.... apply this logic, whatever sum you come across you ll always find the answer