Answer:
a. $12,800
b. $38,400
c. $0
d. $19,200
e. $16,800
Step-by-step explanation:
Given the following;
Sales revenue $96,000
Beginning inventory $12,800
Purchases $64,000
Recall that
Opening inventory + purchases - sales = closing inventory
Also;
a. If Markup is 50% on cost, let the cost of the items sold be T then
50% * T + T = 96,000
1.5T = 96,000
Divide both side by 1.5
T = $64,000
Hence the closing inventory Y may be derived as
Y = 12800 + 64000 - 64000
Y = $12,800
b. If Markup is 60% on sale, let the cost of the items sold be T then
T = $96,000 - (60% * $96,000)
= $96000 - $57600
= $38400
Ending inventory Y = 12800 + 64000 - 38400
Y = $38,400
c. If Markup is 25% on cost, let the cost of the items sold be T then
25% * T + T = 96,000
1.25T = 96,000
Divide both side by 1.25
T = $76,800
Hence the closing inventory Y may be derived as
Y = 12800 + 64000 - 76800
Y = 0
This means all items were sold.
d. If Markup is 40% on sale, let the cost of the items sold be T then
T = $96,000 - (40% * $96,000)
= $96000 - $38400
= $57600
Ending inventory Y = 12800 + 64000 - 57600
Y = $19,200
e. If Markup is 60% on cost, let the cost of the items sold be T then
60% * T + T = 96,000
1.6T = 96,000
Divide both side by 1.6
T = $60,000
Hence the closing inventory Y may be derived as
Y = 12800 + 64000 - 60,000
Y = $16,800