A shop buys goods for KSh 240,000 and sells them at a mark-up of 50% on cost. What is the gross profit?
Answer and explanation
Correct answer: D. KSh 120,000
- Step 1: Mark-up is a percentage of cost: 50% x 240,000 = 120,000. Answer: KSh 120,000. Why not the others: KSh 180,000: That works 50% on the selling price, which is a margin, not a mark-up. KSh 360,000: That is the selling price, not the profit. KSh 240,000: That is the cost of the goods.
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