# 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

EMMAHUTCHESON
Registered Posts: **4**

Can anyone help with how to work out the sales figure from this question please?

0

## Answers

15It'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 :-)