A Fire Destroyed the Inventory of Mantis Company in June

question 30

Multiple Choice

A fire destroyed the inventory of Mantis Company in June. Reconstructed data follows: $$\begin{array} { | l | r } \hline \text { Gross margin as a percentage of sales } & 40 \% \\\hline \text { Sales to date of fire } & 460,000 \\\hline \text { Gross purchases to date of fire } & 280,000 \\\hline \text { Purchase returns and allowances to date of fire } & 8,000 \\\hline \text { Freight-in } & 4,000 \\\hline \text { Sales returns } & 10,000 \\\hline \text { Beginning inventory } & 28,000 \\\hline\end{array}$$ What was the cost of the inventory lost in the fire?

• A)$50,000
• B)$34,000
• C)$30,000
• D)$26,000

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Definitions:

State Law

The body of law enacted by the legislative branch of a state government or established by its judiciary.

Monopsony

A market condition where there is only one buyer for a product or service, giving them greater power over sellers.

Labor Demand Curve

A graphical representation showing the relationship between the quantity of labor demanded by employers and the wage rate.

Equilibrium Wage

The wage rate at which the quantity of labor firms wish to hire equals the quantity of labor workers wish to supply in the labor market.