| 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
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