Interprocess profit-% age calculation on transfer price equalisation with % on cost

Cost Accounts 1510 views 2 replies
User Avatar

Student
82 Points Joined March 2012

I am having problem in understanding while solving problems on Process Costing- Interprocess Profit case.

Can anyone explain me,how -

- 25% Profit on transfer price is equal to 331/3 % Profit on cost

-20% Profit on transfer price is equal to 25% on cost

Kindly elaborate in detail.

0 Reply Share Follow
On 16 October 2016 at 21:45 Report
Replies (2)
User Avatar

Student CA IPC / IPCC
31 Points Joined June 2015
Example :-
Let Take transfer price - 100 Rs
And if profit is 25% of Transfer price , then profit will be = 100 × 25% = 25 .
Therefore cost will be = 100 - 25 = 75
Therefore profit on cost = profit / cost × 100
= 25/75 ×100
= 33.33%
2 Reply
On 16 October 2016 at 22:57
User Avatar

Student
82 Points Joined March 2012

Thanx for your kind help.

Reply
On 17 October 2016 at 06:51


CCI Pro

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Threads

More recent discussions | Post

Related Threads
Loading