CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment
A consignor sends goods costing ₹60,000 to a consignee and invoices them at cost plus 25%. What is the invoice price of the consignment, and what is the loading included in it?
The invoice price is ₹75,000 and the loading is ₹15,000. Cost of ₹60,000 plus 25% markup on cost gives ₹75,000, and the difference from cost is the loading, representing the unrealised profit element in the consignment.
- AInvoice ₹75,000; loading ₹15,000Correct
- BInvoice ₹80,000; loading ₹20,000
- CInvoice ₹75,000; loading ₹12,000
- DInvoice ₹72,000; loading ₹12,000
Explanation
Invoice price = 60,000 × 125/100 = ₹75,000. Loading = 75,000 − 60,000 = ₹15,000, which is 25% of cost (20% of invoice). Using 25% on invoice price would give ₹12,000 wrongly as loading on invoice basis mixed with the wrong base.
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