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October 14th, 2014, 03:58 AM   #1
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Calculate: (i) his average weekly sales during the year.

A shopkeeper made a net profit of N12,500 from his business in 1984. The cost price of all the goods he bought during amounted to N104000. His overheads amounted to N13 500. Calculate:
(i) his average weekly sales during the year.
(ii) his net profit as a percentage of his annual turnover. (Take 1 year = 52 weeks)

What do the following terms mean as it is concerned with the solving of this problems: (i) turnover (ii) overheads
(iii) net profit

Last edited by Chikis; October 14th, 2014 at 04:17 AM.
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October 15th, 2014, 12:26 PM   #2
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As all the information relates to 1984, I'll assume that all references to "the year", "annual", etc., relate to 1984. I'll also assume that the company sold in 1984 all the goods that it bought in that year. As taxes and interest aren't mentioned, I'll assume there are none. I shall take "his" to mean "his business's".

For this type of problem, "turnover" for a specified period is the total net revenue from sales in the period, and "overheads" means company costs other than the total cost to the company of buying the goods sold.

Net profit = turnover - overheads - total cost of goods.
Hence 1984 turnover was N104000 + N13500 + N12500 = N130000, and so the average weekly sales for 1984 was N130000/52 = N2500 (using 52 weeks per year for 1984).

As a percentage of turnover, net profit for 1984 was (N12500/N130000)*100% = 9.615% approximately.

Last edited by skipjack; October 15th, 2014 at 12:30 PM.
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October 17th, 2014, 08:41 PM   #3
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Ok. Let say his total cost = overheads + cost price of all goods = 13500 + 104000 = N117500
Right?
Sales would be cost + profit = 117500 + 12500 = 130000
average sales would be $\displaystyle 130000\div52$ = N2500
Is this right?
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