Bev's revenue for 20X1 was £180 882.Cost of sales was £113 740, and expenses were £32 404.Revenue in 20X2 was 10% higher than in 20X1.Gross profit margin and net profit margin in both years were the same. What were Bev's expenses in the 20X2 financial year (to the nearest £)?

Question

Quizplus · Accepted Answer

First, calculate the gross profit for 20X1: £180,882 (revenue) - £113,740 (cost of sales) = £67,142. The net profit for 20X1 is: £67,142 (gross profit) - £32,404 (expenses) = £34,738. The revenue for 20X2 is 10% higher than in 20X1, so it's £180,882 * 1.10 = £198,970. The gross profit margin for 20X1 is £67,142 / £180,882, and since it remains the same for 20X2, the gross profit for 20X2 is £198,970 * (£67,142 / £180,882) = £73,856. Since the net profit margin remains the same, the net profit for 20X2 is £34,738 / £180,882 * £198,970 = £38,202. Therefore, the expenses for 20X2 are: £73,856 (gross profit) - £38,202 (net profit) = £35,654, which rounds to the nearest £ as £35,616.

Bev's Revenue for 20X1 Was £180 882