A Company's Warehouse Was Destroyed by a Tornado on March

question 97

Multiple Choice

A company's warehouse was destroyed by a tornado on March 15. The following information was salvaged from the ruins: Inventory, beginning: $28,000
Purchases for the period: $17,000
Sales for the period: $55,000
Sales returns for the period: $700
The company's average gross profit ratio is 35%. What is the estimated cost of the lost inventory?

• A)$9,705
• B)$25,995
• C)$29,250
• D)$44,000
• E)$45,000

Analyze performance measurements, including margin and turnover.

Understand the effect of changes in sales, expenses, and assets on financial performance indicators.

Understand the concept of margin in ROI analysis and its computation.

Identify the benefits and drawbacks of using residual income as a performance measure.

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Definitions:

Environmental Quality

The condition or state of the environment based on various indicators, such as air and water purity, and the presence of healthy ecosystems.

GDP

Gross Domestic Product, a total market value of all finished goods and services produced within a country in a given period.

Real GDP

The total value of all goods and services produced within a country's borders, adjusted for inflation, over a specific period.

Literacy

The ability to read and write at a level sufficient for communication and understanding of text.