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Dear Mr. Moffat,
Could you please help me out with the question below, especially part (b)? – The question asks for the selling price.
Luke sells office equipment. He buys a photocopier for £900.
(a) What would the selling price be, excluding sales tax, if a 40% mark-up was applied?
£
(b) What would the selling price be, excluding sales tax, if the sales margin was 40%?
£Best Regards
Mathews
Dear Mr. Moffat,
Please help me understand why the correct answer is A as per the answer guide for this question.The following information is available about the transactions of Rascal, a sole trader who
does not keep proper accounting records:
$
Opening inventory 75,000
Closing inventory 86,000
Purchases 840,000
Gross profit margin 30%Based on this information, what is Rascal’s sales revenue for the year?
A $580,300
B $255,300
C $1,106,300
D $248,700since the question is asking for the sales revenue, my calculation was,
Cost of sales (829,000/70)100 which is 1,184,285.XX which is non of the choices.
First question:
(a) 900 + (40% x 900)
(b) 900 / 0.6Second question:
Your answer is correct. Either you have copied the question wrongly, or there is a mistake in whichever book you are using.
(the correct answer could not possibly ever be A – they would be selling for less than cost – unless there is more information in the question that you have not typed!)Have you watched my free lectures on mark-ups and margins? The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
Dear Mr. Moffat, thank you very much for clearing my doubts. The question was copy pasted from a pdf. Both margin related answers in the book seem to be wrong. This is the Kaplan question bank question 49 & 52. Its available for download in pdf form. I will surely check out the video lectuers. Thanks again.
Best regards
Mathews
I do not have the Kaplan Kit – only the BPP Kit.
(I assume that you bought the pdf version direct from Kaplan? If so, then you can log onto the Kaplan website and find a list of corrections to the questions. If you did not buy it direct but got it from elsewhere, then that would be both illegal and unethical.)
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