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Question:
A business operates on a gross profit margin of 33 1/3%.Gross profit on sales was $800 and expenses were $680.
What is the net profit?
Answer: 5%.
What is the calculation approache? kindly help me to solve this sir.The sales must be 800 x 3 = 2400 (so the gross profit is 1/3 x sales).
The net profit is 800 – 680 = 120.
So the net profit margin is 120/2400
If the gross profit is sales x 1/3, then sales must be gross profit x 3.
(33 1/3% = 1/3)
Sales 100%
Cost 66.7%
profit 33.3%now calculating sales price= (800/33.3)*100=2402.402
net profit= 800-680=120
net profit percentage= (120/2402.402)*100=4.99%=5%
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