Which of the following typically happens as prices for a good or service rises?a. suppliers leave the marketb. consumers seek mo
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Answer:
2020
Inventory TO 2.2
Days on Inventory 166
Gross profit margin: 42.8%
2021
Inventory TO 2.1
Days on Inventory 174
Gross profit margin: 35.6%
Explanation:
Inventory $570,000 $580,000 $330,000
Net sales 1,875,000 1,750,000 1,350,000
Cost of goods sold 1,207,500 1,001,000 939,000
2020:
where:
COGS 1,001,000
beginning 330,000
ending 580,000
Inventory 455000
Inventory TO 2.2
Days on Inventory 166
Gross profit margin:
sales less COGS divided over sales:
(1,750,000 - 1,001,000) / 1,750,000 = 0.428 = 42.8
2021
where:
COGS 1,207,500
beginning 580,000
ending 570,000
Inventory 575000
Inventory TO 2.1
Days on Inventory 174
Gross profit margin:
sales less COGS divided over sales:
(1,875,000 - 1,207,500) / 1,875,000 = 0,356 = 35.6%