Propark is a retailer selling clothes to the public from its stores across the country. Shirts sell for £30 each. Each shirt costs Propark £16 to buy from its suppliers. The suppliers reduce the cost of each shirt by £1. Propark passes on this purchase price reduction to its customers and reduces the selling price of shirts in its stores by £1. This reduction in purchase and selling prices will have no effect on the gross profit % generated on the sale of each shirt.

Question

Quizplus · Accepted Answer

The gross profit percentage is calculated as (Selling Price - Cost Price) / Selling Price. Initially, it was (£30 - £16) / £30 = 46.67%. After the reduction, it becomes (£29 - £15) / £29 = 48.28%. The gross profit percentage increases, so the statement is false.

Propark Is a Retailer Selling Clothes to the Public from Its