If selling price is fixed 25% above the cost, the Gross Profit ratio is ___ Options: A . &nbsp 12.5% B . &nbsp 25% C . &nbsp 50% D . &nbsp 20%

If selling price is fixed 25% above the cost, the Gross Profit ratio is __

Question -

If selling price is fixed 25% above the cost, the Gross Profit ratio is ___

Options:

A . 12.5%

B . 25%

C . 50%

D . 20%

Answer: Option D
:
D

Let cost = x
Then, revenue from operations = 1.25 x
Profit = 0.25 x
Gross profit ratio = $\frac{0.25 x}{1.25 x} \times 100 = 20 %$

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