JAMB Accounting 2014 Objective — Question 37

Question 37 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2014 Objective paper, with the correct answer and a full explanation.

If goods are sent to branch at 25% on cost, what will be the cost of goods sent to the branch at selling price of #100,000?

A. N130,000
B. N125,000
C. N80,000
D. N75,000Correct

Explanation

Margin = 25/(100+25) × N100,000 = N20,000. Cost of goods = selling price − profit margin = N100,000−N20,000 = N80,000... recalculated: using the 25% on cost markup, cost price = N100,000/1.25 = N80,000.

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