FSTP- sample assessment 2

I am struggling to understand the task 2 in the sample assessment 2 available on the website , particularly the point B and C.
I would have thought the cost of goods sold would be 52,800, however the answer is 55,000, I am not sure how to relate this answer and find out how this figure has been calculated.
And how do we calculate the Inventory if we only have cost of sales and purchases ?
Please help! thank you


  • ariadne
    ariadne Registered Posts: 218
    The sales figure you are given is the revenue for the year. You are told that there is a mark up of 20% so the sales figure is both the cost of sales and the profit. Because it is a mark up the cost of sales is 100% (as opposed to Margin where the sales price is the 100% figure). So you now know that the sales of £66,000 is 100% + 20%. To find the cost of the goods, the 100%, you need to divide the sales figure by 120 (%) and then times by 100(%) - this takes away the 20% mark up. The maths is similar to finding out the net cost of goods when VAT is included only the percentage changes.


    66,000/120x100 = 55,000

    Finding the inventory remaining is much easier for this example. Simply minus the previous answer (cost of goods sold) from the purchases. Because this is a new company it has no opening inventory.

    59,120 - 55,000 = 4,120

    This is a good opportunity to really get to grips with percentages. I am much better since doing L3, although it was Costs and Revenues and Cash Management I started with and needed it for those modules too. There is a MyAAT webinar on this module and part of it covers mark up and margins, along with other missing record tasks.
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