Answer:
A $1,200,000
Explanation:
The correct answer is D.
the gross margin equals 40% of net sales = 40%* 1,800,000= 720,000
Cost of goods sold will therefore be 60% of net sales;
Cost of goods sold = (60% * 1,800,000) = 1,080,000.
Cost of goods available for sale = cost of goods sold + the cost of ending inventory.
Cost of goods available for sale = 1,080,000+120,000 = $1,200,000
