Use the question to answer this question:
| Opening stock | ₦ |
| Department A B | 100 800 |
| Purchases: A B Wages of workers Salaries | 1500 2000 50 100 |
| Sales A B | 3000 5000 |
Expenses are to be shared in the ratio of sales.
The net profit for departmental A is
A
1880
B
1600
C
880
D425
Answer is D
Amount of goods sold for the departments = 1000 + 1500 = 2,500
Gross profit = Sales – Cost of goods sold
3000 – 2500 = ₦500
Hence,
Net profit = Gross profit – Expenses
500 – (50 ÷ 2 + 100 ÷ 2)
500 – (25 + 50)
500 – 75
Net profit = ₦425
