Vitoro restaurant made a sale of One hundred thousand naira (N100,000). The amount spent on ingredient for preparing the meal was Twenty-five thousand naira (N25,000), members of staff were paid Forty thousand naira (N40,000) and other expenses such as rent and utility bills was Fifteen thousand naira (15,000).
Use this information to answer questions 4(a),(b) and (c).
(a) Identify the overhead cost and labour cost.
(b) Calculate net profit.
(c) Calculate the percentage net profit.
Explanation
(a) Identification of Overhead cost and Labour Cost: Overhead cost: #15,000
Labour cost:#40,000
(b) Calculation of Net Profit: Sales-Total cost = Net Profit.Sales= #100,000. Total cost = Food cost +Labour cost + Overhead cost. #25,000 +#40,000 +#15,000- #80.000. To calculate net profit therefore, Sales- Total cost = Net profit.-#100,000 #80,000 =#20,000
(c) Calculation of Percentage Net Profit: % net profit = Net profit divided by Sales x 100
#20,000 divided by #100,000 x 100 =20%.