Between January 1 and April 30, a Company's Sales Amounted

question 134

Essay

Between January 1 and April 30, a company's sales amounted to $140,000 and its purchases amounted to $120,000. The January 1 inventory was $34,000. Using the gross margin method, what is a reliable estimate of the April 30 inventory if the prior period's gross margin has been:
(a) 40 percent based on cost? April ending inventory is $_____________.
(b) 40 percent based on selling prices? April ending inventory is $_____________.

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Definitions:

Productivity

The measure of how efficiently and effectively resources are used to produce goods and services.

Synthetic Systems

Manufacturing system that combines inputs to create a finished product or change it into a different product.

Auto Salvage

The business of dismantling wrecked or decommissioned vehicles to sell their usable parts, often involving recycling processes.

Output

The amount of something produced by a person, machine, business, or industry.