Did my exam today and need help!

kellypreston

I got completely thrown off a question when I needed to calculate sales from the following information:
Inventory holding period
Inventory
Gross profit margin
Net assets

Can someone please explain/provide a formula I would use to calculate sales based on this?I know you can calculate cost of sales from inventory and inventory holding period but then I got completely lost.

Can someone also tell me if AAT give you follow through marks? Because I made up a figure for sales so I could answer the other questions

mergen

Think of Profit and Loss statement and how it looks. What comes first and then work your way down.
You've got Inventory Holding Period = Inventory/C of Sales x 365. Once you've got Cost of Sales, you can work your way up to Sales.

kellypreston

But how? That’s what I’m stuck on. How do you get from cost of sales back to sales? I know you have gross profit margin but that’s a percentage not a number. Sorry if I’m being stupid here

crispy

Hello,
Made up example:

Inventory Holding: 20 Days
Closing Inventory: £ 10,000
Gross Profit Margin: 20%

First work out missing pruchases figure: £ 10,000/20 Days * 365 Days = £ 182,500
Then Add Gross Margin to arrive at Sales £ 182,500 / 0.8 = £ 228,125

Hope this helps.

fournaanjez

Re-arrange inventory holding period to find COS.

Then if you know the gross profit margin is, for example, 20% you can find sales by multiplying COS by what you want by what you've got ie 100/80. This will give you a sales figure.

With regards to the follow through marks, I have no idea sorry. I should imagine if it is a human marked part of the exam that there would be, but can't give you any guarantee.

kellypreston

I see! Thanks everyone, I will now know for next time

mergen

@kellypreston sorry was rushing trying to type and miss read your post. I read it as Gross Profit and didnt see margin. What the guys above have said.

charlotte1234

I'm so glad i'm not the only one who didn't get this question. I can't remember how I answered but this question could be the difference between me passing or failing.....I should get my result tomorrow but I will keep you answers in mind if I need to retake and definitely prepare for this!

TarynPitchfork

I'm having the same issue having taken my exam yesterday, do you know if AAT gave you any marks for this even though the sales revenue figure was incorrect but calculations were good correctly?

salma1

I did my exam today and this question completely thrown me out. I have answered the question but I know it was wrong.
Inventory holding period is 45 days, inventory vaule £225000, gross profit margin 25%, cost of sales 2%, cost admin 3.5%, net asset £18736.
This was the exam question any suggestions how it should have been answered? It required the following
Sales
Cost of sales
Gross profit
Cost admin
Net profit

Thanks

CornishPixie

You can't discuss exam questions in here Salma.

salma1

Sorry I didn't know. But they are not the exact figures it's the style of the question.
I won't ask anymore questions Cornishpixie.
Thank you

CornishPixie

Go ahead and ask by all means Salma1 - that's the reason this forum is here - so that you can get advice on how to approach a question.

It's just in your post above, you said "This was the exam question any suggestions how it should have been answered?" which indicated that this was the actual question - which is not allowed.

Which practice assessment question did these figures come from? If you post that question, then people will be able to help you.

Amna

AAT Assessment 2
HI
I need help in task2 the trade sells an item to a customer 405 including VAT calculate the original cost?
Thanks