American Lumber Has the Following Company Information for October: Goods

question 85

Multiple Choice

American Lumber has the following company information for October: goods available for sale at cost are $24,000, retail is $38,400, and sales at retail equal $30,400. Bert has a normal gross profit of 30%. The cost of estimated ending inventory under the gross profit method is: (Round any percentages to two decimal places, X.XX%, and your final answer to the nearest dollar.)

• A) $8,000.
• B) $14,880.
• C) $5,600.
• D) $2,720.

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Definitions:

Directly Proportional

A relationship between two variables where if one increases, the other one also increases at a constant ratio.

Inversely Proportional

A relationship between two variables where when one variable increases, the other decreases at a rate that maintains the constant product of the two variables.

Power Source

A component or system that provides electrical power to a circuit or device.

Electrostatic Attraction

The force of attraction between oppositely charged particles.