Asked by Elijah Price on Jun 16, 2024
Verified
A business has sales of $184,158 and a normal gross profit of 45%. The estimated cost of goods sold is: (Round your answer to the nearest dollar.)
A) $184,158.
B) $82,871.
C) $101,287.
D) Cannot be determined.
Gross Profit
The financial difference between sales and the cost of goods sold, indicating the efficiency of a company in managing its production and inventory.
Estimated Cost
An approximation of the monetary value required to complete a task, make a product, or provide a service.
- Comprehend the fundamental principles and computation involved in determining the cost of goods sold.
- Engage the gross profit procedure to approximate inventory figures and fathom its implications for financial reporting.
Verified Answer
AC
Anthony ChkeirJun 19, 2024
Final Answer :
C
Explanation :
The estimated cost of goods sold can be calculated by subtracting the gross profit from the total sales. Gross profit is 45% of sales, so the cost of goods sold is 55% of sales (100% - 45% = 55%). Therefore, the cost of goods sold is 55% of $184,158, which equals $101,287 (rounded to the nearest dollar).
Learning Objectives
- Comprehend the fundamental principles and computation involved in determining the cost of goods sold.
- Engage the gross profit procedure to approximate inventory figures and fathom its implications for financial reporting.