Sisley Wollenstein Limited made an actual net profit of £31 400 in the financial year ended 31 March 20X5.Revenue was £39 000 higher than budget, and actual net profit margin was 5.7% compared to budget net profit margin of 4.9%.Budget gross profit margin was 33.5%. What was the company's budget cost of sales for the year (to the nearest £)?

Question

Quizplus · Accepted Answer

We can use the following formula to calculate the budget cost of sales:

Budget Cost of Sales = Budget Revenue x (1 - Budget Gross Profit Margin)

We know that the budget gross profit margin was 33.5%, so the budget cost of sales can be calculated as:

Budget Cost of Sales = £39,000 / (1-33.5%) 
Budget Cost of Sales = £39,000 / 0.665 
Budget Cost of Sales = £58,647.37

Therefore, the closest answer to the nearest £ is B) £340,398.

Sisley Wollenstein Limited Made an Actual Net Profit of £31