KR Sales Had $1,200,000 in Sales Last Month

question 98

Multiple Choice

KR Sales had $1,200,000 in sales last month.The variable cost ratio was 60% and operating profits were $80,000.What sales volume does KR's need to yield a $200,000 operating profit?

• A)$1,000,000.
• B)$1,200,000.
• C)$1,500,000.
• D)$2,000,000.

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Definitions:

Ending inventory

The total value of goods available for sale at the end of an accounting period after all sales transactions have been accounted for.

Current prices

Prices at which goods and services are being sold in the present market, reflecting the current economic conditions.

LIFO

The "last in, first out" method of inventory valuation, where the most recently acquired items are considered sold first, used in periods of inflation to increase cost of goods sold and reduce taxes.

Periodic inventory system

An inventory accounting system where updates to inventory accounts are made periodically, typically at the end of a financial period, rather than after each transaction.