Given the gross cost of $75,000 and net profit of 30% of the gross cost, selling and delivery expenses amounted to $12,000, the selling price is $1,09,500.
What is gross cost?
Gross cost is the entire acquisition cost of an object. It is the cost of the product before subtracting all deductions.
Thus, the gross cost of the machine purchased by the distributor = $75000.
(discounts availed by the distributed are not accounted in gross cost.)
What is net profit?
Net profit is the amount of money your business earns after deducting all operating, interest, and tax expenses over a given period of time.
Given that, the distributor sold the machine at net profit 30% of the gross cost.
Net revenue = gross cost + 30% of gross cost
[tex]= 75000 + \frac{30}{100}*75000\\ \\= 75000 + 22500\\\\= 97500\\\\[/tex]
Net revenue = Selling price - Expenses
[tex]97500 = selling\ price - 12000\\\\selling\ price = 97500 + 12000 = 1,09,500[/tex]
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