Accounting 0452 · IGCSE · Sole traders

Sole traders — practice question

Uzoma gave the following figures for her first year of trading: - sales $46\,000$ - gross profit $21\,850$ - advertising $2700$ - other expenses $11\,350$ - profit for the year $7800$ Uzoma hopes to raise her profit in future and is looking at four possible options. Which option would result in the greatest increase in her profit for the year?

  • Aearning commission, which would increase profit for the year by $20\%$
  • Bincreasing advertising by $1000, which would increase gross profit by $2500$
  • Cincreasing the sales price, which would increase gross profit by $2000$
  • Dreducing other expenses by $1500$ and earning commission of $1000$

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