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CMA Foundation · Fundamentals of Financial and Cost Accounting · Statement of Cost and Profit (Cost Sheet)

Gupta Plastics has a cost of sales of Rs 3,60,000 for 6,000 units. It marks the selling price to earn a profit of 25% on cost. What is the profit per unit?

The profit per unit is Rs 15. Cost per unit is 3,60,000 divided by 6,000 units, which is Rs 60, and profit at 25% on cost is a quarter of that. Rs 12 would wrongly treat the margin as 20% of cost.

  1. ARs 12
  2. BRs 15Correct
  3. CRs 20
  4. DRs 60

Explanation

Cost per unit = 3,60,000 / 6,000 = Rs 60. Profit at 25% on cost = 60 x 0.25 = Rs 15 per unit. Check: total profit 90,000 / 6,000 = 15. Rs 12 would result from taking 20% of cost, which is profit on selling price confusion.

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