Question

You know these facts about a companys prior calendar year: • Beginning inventory: 100 units at $10 each • Ending inventory: 50 units at $9 each • Inventory purchased for resale during the year: $2,000 What can you calculate using this information? Select all that apply.

a) Gross sales
b) Net profit
c) Contribution margin
d) Cost of goods sold
e) None of the above

Answer 1

From the information given, we can only calculate the Cost of Goods Sold (COGS) for the company, which amounts to $2,550. To calculate gross sales, net profit, or contribution margin, additional financial data would be necessary.

Step-by-step explanation:

Using the provided information about a company's inventory and purchases, we can calculate the Cost of Goods Sold (COGS). Here is the calculation:

COGS = Beginning Inventory + Purchases - Ending Inventory

COGS = (100 units × $10) + $2,000 - (50 units × $9)

COGS = $1,000 + $2,000 - $450

COGS = $2,550

The available information is not sufficient to accurately calculate gross sales, net profit, or contribution margin. These would require additional information such as sales data, operating expenses, and variable costs.