Given:
Stock Trunover Ratio = 6 times
Average Stock = Rs. 8,000
Selling price = 25% above cost
What is the amount of gross profit?

Solution (By Examveda Team)

First, let's understand the terms:
* Stock Turnover Ratio: How many times a company sells and replaces its inventory during a period.
* Average Stock: The average value of inventory during the period.
* Selling Price: The price at which goods are sold to customers.
* Cost of Goods Sold (COGS): The direct costs of producing the goods sold by a company.
* Gross Profit: Revenue minus the cost of goods sold. It represents the profit a company makes after deducting the costs associated with producing and selling its products.

Now, let's break down the solution:

1. Find the Cost of Goods Sold (COGS):
We know: Stock Turnover Ratio = COGS / Average Stock.
Therefore, COGS = Stock Turnover Ratio * Average Stock.
COGS = 6 * Rs. 8,000 = Rs. 48,000.

2. Find the Revenue (Sales):
We know the selling price is 25% above the cost. This means the COGS represents 100% of the cost.
If COGS is 100%, then the revenue (selling price) is 100% + 25% = 125% of the COGS.
Revenue = COGS * 1.25
Revenue = Rs. 48,000 * 1.25 = Rs. 60,000.

3. Calculate the Gross Profit:
Gross Profit = Revenue - COGS.
Gross Profit = Rs. 60,000 - Rs. 48,000 = Rs. 12,000.

Therefore, the correct answer is:
Option D: Rs. 12,000