Question

What will be the amount of Gross Profit, if Revenue from Operations are ₹ 6,00,000 and Gross Profit Ratio is 20% of cost?

Options

• ₹ 1,50,000

• ₹ 1,00,000

• ₹ 1,20,000

• ₹ 5,00,000

Answer 1

₹ 1,00,000

Explanation:

Let the Cost of Revenue from Operations be x.

Gross Profit = 20% of cost

Revenue from Operations = Cost of Revenue from Operations + Gross Profit

6,00,000 = `x + 20/100 x`

6,00,000 = `120/100 x`

`(6,00,000 xx 100)/120` = `x`

Cost of Revenue from Operations `(x)` = ₹ 5,00,000

Gross Profit = 20% of cost

= `20/100 xx 5,00,000`

= ₹ 1,00,000