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Sir i know how to solve mark up margin questions by writing down sales=cost + profit..in mark up cost is 100 and margin sales is 100..
But here sir in this question there is no percentage given..
During the year S sold goods to P for $20,000 making a markup of one third. Only 20% of these goods had been sold before the end of the year, the remainder is still in the inventory..
Solution
Sir m facing issue to find out the cost
(100/133% multiply by $20) dont get where does this 133 comes from? The rest i understand.i dont get how to get 15 in cost1/3 expressed as a % is 33.33% (100 x 1/3).
However rather than use percentages when you get these figures, it is easier to say that for every $3 cost, the profit is $1 and therefore the selling price is $4.
Therefore for inventory with a selling price of $16,000 (80% x $20,000), the cost is 3/4 x $16,000 = $12,000.
This is all explained in my free lectures on mark-ups and margins. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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