CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment
Mehta Traders sends goods costing ₹80,000 to its consignee, invoiced at 25% above cost. What is the loading (excess of invoice price over cost) on these goods?
The loading is ₹20,000. Goods costing ₹80,000 invoiced at 25% above cost have an invoice price of ₹1,00,000, and the difference between invoice price and cost is the loading. Taking 25% of the invoice price instead of cost would be a wrong base.
- A₹16,000
- B₹20,000Correct
- C₹25,000
- D₹1,00,000
Explanation
Invoice price = 80,000 × 125% = ₹1,00,000. Loading = 1,00,000 − 80,000 = ₹20,000. ₹25,000 wrongly takes 25% of the invoice price, and ₹16,000 takes 20% of cost.
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