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bits and pieces (6/09)
For part a) of this question, how has the purchase cost been calculated and what does it represent.
If the gross profit is 70%, then the remaining 30% is what. Is it cost of sales, or purchase cost or something else.
I calculated the average sales revenue to be 800000 and the gross profit of 50% of that i.e. 400000. But when I calculated the gross profit by subtracting 335000 from 800000 I got a different figure of 465000. Why am I getting this difference, and which one is correct.
The remaining 30% is the cost of sales.
The correct answer is the printed answer. I cannot explain where your figures came from. If you are not clear about the workings in the printed answer then say which part you are not clear about.