Skip to content

CA Intermediate · Cost and Management Accounting · Job Costing

Mehta Printers quoted for Job P-7 at cost plus 25% on selling price (i.e., profit is 25% of the selling price). The job's total cost was ₹96,000. What is the quoted price?

With profit at 25% of selling price, cost represents 75% of the price. Dividing ₹96,000 by 0.75 gives a quoted price of ₹1,28,000. Adding 25% on cost would wrongly give ₹1,20,000, which is a profit of only 20% of price.

  1. A₹1,20,000
  2. B₹1,28,000Correct
  3. C₹1,00,000
  4. D₹1,32,000

Explanation

Profit is 25% of selling price, so cost is 75% of price. Price = 96,000 / 0.75 = 1,28,000. Check: 25% of 1,28,000 = 32,000; 1,28,000 - 32,000 = 96,000. The ₹1,20,000 option wrongly adds 25% to cost (markup on cost).

Did you get it right without looking?

One question tells you little. A timed set on Job Costing shows your real accuracy, how long you take and where you lose marks.

Practise Job CostingFree diagnostic mock

More Job Costing questions