A company wishes to earn a 15 % profit margin on selling price when quoting for a job . Which of the following is the profit mark-up on cost which will achieve the required profit margin? show calculation also.
(a) 15 %
(b) 17.65%
(c) 85 %
(d) 13.04 %
It will be 13.04% on cost
suppose the selling price is 100, then the profit will be 100*15% i.e. 15
and the cost will be 100-15 = 85
so the profit on cost will be 15/85*100= 17.65%
Dont understand why this Question (multiple choice) by Jyoti
Always remember this golden rule
1/X ON cost = 1/x+1 on sales
Profit on Cost will obviously be more than profit on sales applying common sense, unless you are selling a product less that its cost, in that case it will be loss and not profit
CAclubindia
