Use the question to answer this question:
| Opening stock | ₦ |
| DepartmentAB | 100800 |
| Purchases:ABWages of workersSalaries | 1500200050100 |
| SalesAB | 30005000 |
Expenses are to be shared in the ratio of sales.
The net profit for departmental A is
A. 1880
B. 1600
C. 880
D. 425
Correct Answer: D
Explanation
Cost of goods sold for departmental = 1000 + 1500 = 2,500
Gross profit = Sales - Cost of goods sold
3000 - 2500
⇒ ₦500
Therefore, Net profit = Gross profit - Expenses
500 - (50 ÷ 2 + 100 ÷ 2)
500 - (25 + 50)
500 - 75
Net profit = ₦425
