A Fire Completely Destroyed the Inventory Housed in a Warehouse

question 29

Multiple Choice

A fire completely destroyed the inventory housed in a warehouse in August. Reconstructed data follows: $\begin{array} { | l | l | } \hline \text { Sales to date of fire } & \$ 340,000 \\\hline \text { Gross margin as a percent of cost } & 60 \% \\\hline \text { Gross purchases to date of fire } & 200,000 \\\hline \text { Beginning inventory } & 30,000 \\\hline \text { Purchases returns and allowances to date of fire } & 10,000 \\\hline \text { Freight-in } & 4,000 \\\hline \text { Sales returns } & 25,000 \\\hline\end{array}$
Compute the loss of inventory due to the fire.

• A) $98,000
• B) $54,667
• C) $27,125
• D) $34,456

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Definitions:

Non-financial Measure

Performance measures that are not expressed in monetary units but rather in terms of physical units, percentages, indexes, or any other non-monetary metrics.

Customer Satisfaction Rating

A measure, often expressed as a percentage or scale, of the degree to which customers are happy with a product or service.

Financial Outcomes

The monetary results of an organization's operations and activities, reflecting its financial health and profitability.

Traditional Accounting System

An accounting system primarily focused on the preparation of financial statements and compliance with accounting standards, often with less emphasis on detailed cost tracking or management decision support.