Answered: Assume that gross profit averages 35%…

Assume that gross profit averages 35% for BITCO. If net sales are $1,500,000, beginning inventory is $200,000, and purchases are $1,000,000 What is BITCO's estimated ending inventory?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 1P

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Assume that gross profit averages 35% for BITCO. If net sales are $1,500,000, beginning inventory is $200,000, and purchases are $1,000,000 What is BITCO's estimated ending inventory?

$175,000

$200,000

$225,000

$250,000

$275,000

Assume that gross profit averages 40% for RAMCO. If sales are $1,600,000 and sales returns are $100,000, beginning inventory is $200,000, and purchases are $1,000,000 What is RAMCO's estimated Cost of Goods Sold?

Group of answer choices

$900,000

$300,000

$600,000

$640,000

$960,000

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