Hampton Co

question 72

Essay

Hampton Co. took a physical count of its inventory on December 31. In addition, it had to decide whether or not the following items should be added to this count.
Indicate which items should be added to (answer: yes) and which items should not be added to (answer: no) the December 31 inventory count.

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Definitions:

Mark-up

The amount added to the cost price of goods to cover overhead and profit; the difference between the selling price and the cost price.

Sale Price

The final amount at which an item or service is sold after any discounts or deductions.

Operating Profit

Earnings before interest and taxes (EBIT), reflecting the profit a company makes from its operations, before financial and other non-operational costs.

Reduced Price

A lower cost for goods or services, typically offered during sales, discounts, or promotions.