Question

the lazy company's cost of goods manufactured was $240,000 when its sales were $400,000 and the gross margin was $120,000. if the ending inventory of finished goods was $200,000 the beginning inventory of finished goods must have been

Answer 1

$240,000= beginning finished inventory

Step-by-step explanation:

To calculate the beginning inventory of finished goods, we need to use the following formula:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

First, we need to calculate the COGS:

Gross margin= sales - COGS

COGS= 400,000 - 120,000

COGS= $280,000

280,000 = beginning finished inventory + 240,000 - 200,000

240,000= beginning finished inventory