Use the question to answer this question:
Opening stock ₦
Department A B 100 800
Purchases: A B Wages of workers Salaries 1500 2000 50 100
Sales A B 3000 5000
Expenses are to be shared in the ratio of sales. The net profit for departmental A is
  • A 1880
  • B 1600
  • C 880
  • D 425
jamb 2019accounting

The correct answer is D. 425

Cost of goods sold for departmental = 1000 + 1500 = 2,500

Gross profit = Sales - Cost of goods sold

3000 - 2500

⇒ ₦500

Therefore, Net profit = Gross profit - Expenses

500 - (50 ÷ 2 + 100 ÷ 2)

500 - (25 + 50)

500 - 75

Net profit = ₦425

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