Assessment 1 Task 6 Decision &Control
EMMAHUTCHESON
Registered Posts: 4
Can anyone help with how to work out the sales figure from this question please?
0
Comments

Hi @EMMAHUTCHESON ,
It's not the fastest way, but let's try :)
We have been provided with the following information:
Inventory holding period  45 days
Inventory  £225,000
Gross profit margin  20%
The following formula can be used to calculate the missing sales value:
GP%= Gros Profit/sales
Gross Profit = Sales  cost of sales
However, we also do not know the value of the cost of sales (CoS)
To calculate the cost of sales, we can use the following formula
Inventory holding period = (Inventory/Cos of sales)*365
45days=(225,000/cost of sales)*365
45days = 225000*365/Cost of sales
45 Cost of sales = 82,125,000
Costs of sales = 1,825,000
To calculate Sales:
GP% = GP/Sales
GP%= (Sales  costs of sales)/sales
20%=( sales  £1,825,000)/sales
1/5 sales = sales  costs of sales
sales  1/5 sales = costs of sales
5/5 sales  1/5sales = CoS
4/5 sales = CoS
4/5 sales = £1,825,000
Sales= £1,825,000*5/4
sales = £2,281,250
I hope this helps :)
0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 12.5K For AAT students
 318 NEW! Qualifications 2022
 161 General Qualifications 2022 discussion
 11 AAT Level 2 Certificate in Accounting
 56 AAT Level 3 Diploma in Accounting
 87 AAT Level 4 Diploma in Professional Accounting
 8.8K For accounting professionals
 23 coronavirus (Covid19)
 272 VAT
 92 Software
 273 Tax
 135 Bookkeeping
 7.2K General accounting discussion
 200 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 345 Feedback for AAT
 2.8K Chat and offtopic discussion
 582 Job postings
 16 Who can benefit from AAT?
 36 Where can AAT take me?
 42 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 66 AAT membership