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 (Covid-19)
- 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 off-topic 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