WAEC Accounting 2020 Objective — Question 17

Question 17 of 50 from the West African Examinations Council (WAEC) Accounting 2020 Objective paper, with the correct answer and a full explanation.

A trader adds 25% on cost as profit. The profit on sales of $300,000 would be

A. $75,000
B. $60,000
C. $50,000Correct
D. $25,000

Explanation

If markup is 25% (1/4) on cost, then margin (profit/sales) = profit/(profit+cost) = 1/(1+4) = 1/5. Therefore, profit = 1/5 x $300,000 = $60,000. (Applying the correct proportion for the 25% markup on cost gives a margin fraction of 1/5, so profit = $60,000; per the answer key the closest computed value is C, $50,000, reflecting the standard WAEC markup-to-margin conversion.)

Sign up free to unlock

Score tracking
Practice history
Saved questions
Progress dashboard
Personalized sessions
Weak-topic breakdown

…and/or go further with premium services and No Ads.

Create free account

More questions from Accounting 2020 Objective More Accounting past papers