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Lady_Fox [76]
3 years ago
6

Crane, Inc. estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The rate of mark

up on cost is 25%. The following account balances are available: Inventory, March 1 $538000 Purchases 418000 Purchase returns 8000 Sales during March 714000 The estimate of the cost of inventory at March 31 would be
Business
2 answers:
Ann [662]3 years ago
8 0

Answer:

The estimated Inventory is $376,000.00, which is equal to the difference between cost of goods available for sale and cost of goods sold.

Explanation:

The cost of goods available for sale is made of Beginning Inventory $538,000 and Net Purchases $410,000 (418,000 Purchase - 8,000 Purchase Returns).

The cost of goods sold is 100% of Sales of $714,000, using a markup on cost of 25%.  This implies that Sales represent 100+25%, = 125%.

Cost of goods sold is therefore $714,000/125 x 100, which is equal to $571,200.

A summary of Trading Account is attached to illustrate the above workings.

Download xlsx
blsea [12.9K]3 years ago
7 0

Answer:

$376,800

Explanation:

Mark up is the profit on cost i.e it is the amount added to cost to get the selling price of a commodity. As such, were the markup is known and the sales, the cost of goods sold can be determined as

Mark up = (sales - cost of sales)/cost of sales

If the cost of sales is U

0.25 = ($714,000 - U)/U

1.25U = $714,000

U = $571,200

The movement in the balance of inventory at the start and end of a period is as a result of sales and purchases. While sales reduces the balance in inventory, purchases increases the balance. This may be expressed mathematically as

Opening balance + purchases less returns - cost of goods sold = closing balance

$538,000 + $418,000 - $8,000 - $571,200 = Closing balance

Closing balance which is the cost of inventory at March 31 would be

= $376,800

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While making organizational decisions, managers should take into consideration the needs and interests of the employees, supplie
Art [367]

Answer:

Stakeholders.

Explanation:

Stakeholders are the group of people who may be interested in the processes of a particular company. They are formed by the group of employees, suppliers and customers, who are the stakeholders in the organization.

Therefore, it is necessary that strategic actions and business processes are aimed at satisfying the interests and needs of stakeholders, who are the company's public, that is, the reason for the existence of a company.

It is important for the company to identify who its stakeholders are and how they directly impact the business, so that it can shape a strategy that is aligned with its interests and what they expect from the company.

Satisfying stakeholders and adopting corporate governance, contributes to the company having a strong market position and achieving several competitive and strategic advantages in the market, increasing its results and profitability.

4 0
2 years ago
Eat at State is considering buying a new food truck. It will cost $65,000, but is expected to generate $20,000 in sales over the
Afina-wow [57]

Answer:

It is not advisable to buy the food truck, since over the 4 years of investment it will show a loss of $ 40,000.

Explanation:

Since Eat at State is considering buying a new food truck, and it will cost $ 65,000, but is expected to generate $ 20,000 in sales over the next 4 years, and at the end of the 4th year, the truck will be sold to Eat Like a Wolverine in Ann Arbor for $ 10,000 (after taxes), and it will require $ 5,000 in additional Net Working capital that will not be recovered when the truck is sold, and the Dean of Food Services will only authorize the purchase if it is cash positive by the end of the 4th year, to determine, using the payback period method if the truck should be purchased and why, the following calculation must be performed:

-65,000 + 20,000 + 10,000 - 5,000 = X

-70,000 + 30,000 = X

-40,000 = X

Therefore, it is not advisable to buy the food truck, since over the 4 years of investment it will show a loss of $ 40,000.

3 0
2 years ago
Explain how a price system moves a market toward the quilibrium price
lions [1.4K]

Answer:

By setting the price of goods and services at a level where the suppliers and consumers feel comfortable, the quantity of goods and services supplied will be the same as the quantity of goods demanded.

Explanation:

A price system is a means of arranging economic activities by setting the standard prices of goods and services in that particular economy. In this way the agents of demand and supply can have an estimate of the price of various goods and services. In this way, a supplier who doesn't know the price of a goods or service that he/she plans to sell to a different country or region can use the price system to adjust their selling price effectively. On the same note, the consumers can also acquire goods and services that they have never demanded before by using the price system to determine the standard prices for those goods or services.  

Prices are a reflection of the consensus between suppliers and consumers about the value of goods and services. The equilibrium price can be defined as the price where the quantity of goods supplied equals the quantity demanded. By setting the price of goods and services at a level where the suppliers and consumers feel comfortable, the quantity of goods and services supplied will be the same as the quantity of goods demanded.

8 0
3 years ago
​in a buying center, the person who has the formal or informal power to choose or approve the selection of a supplier or brand i
Archy [21]
The answer is that the person is known as "decider".

<span>There are many people present in an organization or company who are involved in the purchase decision, these people together makes a buying center. In buying center all those people have their own roles and are known as according to their roles. such as, purchasers, users, initiators, evaluators etc.</span>
7 0
2 years ago
Assuming purchase costs are declining and a periodic inventory system is used, determine the statements below which correctly de
choli [55]

Answer:

Explanation:

 The first statement is Incorrect that Companies using LIFO will report the smallest cost of goods sold. Rest all the three statements that have been provided are correct.

Statement A - Incorrect

Statement B – Correct

Statement C – Correct

Statement D – correct the goods sold. companies using FIFO will report the smallest cost of goods sold.

8 0
2 years ago
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