FMM 225 Module Two Merchandising for a Profit (1)

On a traditional income statement, sales revenue less cost of goods sold equals   Question 26 options:   operating income.   operating expenses.   contribution margin.   gross profit.

Question 4: The difference between total sales revenue and total cost of goods sold is the   Group of answer choices a Net marketing contribution b Gross marketing contribution c All of these d Trade margin

Solomon Manufacturing Company was started on January 1, year 1, when it acquired $83,000 cash by issuing common stock. Solomon immediately purchased office furniture and manufacturing equipment costing $7,000 and $ 27,600, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,900 salvage value and an expected useful life of three years. The company paid $11, 100 for salaries of administrative personnel and $15, 600 for wages to production personnel. Finally, the company paid $10, 380 for raw materials that were used to make inventory. All inventory was started and completed during the year. Solomon completed production on 4, 400 units of product and sold 3,490 units at a price of $15 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)

Concept introduction Gross profit ratio: Gross profit ratio calculated by dividng the gross profit by sales.The formula to calculate the gross profit ratio is as follows: Gross profit = Gross profit/sales Gross profit is calculated using the following formula: Gross profit= Sales-Cost of Goods Sold To choose: The correct term for excess of sales over the cost of goods sold.

Sub. Account

Revenue minus all direct costing of making the goods or supplying the service is known as?a. Gross profitb. Cost of salesc. Expensesd. Net profit

Requirements:  4. Cost of goods sold 5. Gross profit 6. WIP end 7. Materials inventory 8. FG end

The of each product's sales to. O selling price, profit O unit price, expense O ratio, total sales O profit, revenue yields the sales mix.

________ examine(s) how customers differ in their profitability.       Select one: a. Price discounting b. Customer-cost hierarchy c. Customer-profitability analysis d. Customer revenue analysis

Generally, the revenue account for a merchandising business is entitled Oa. Gross Sales Ob. Sales Oc. Fees Earned Od. Gross Profit

The gross margin estimation method estimates the cost of goods sold by multiplying the costs to sales ratio by purchases. O multiplying the sales revenue by the inventory turnover ratio. multiplying the cost of goods available by the gross margin percentage. O multiplying the sales revenue by cost-to-sales ratio.

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Requirement 3. Calculate the cost of goods sold for each company Begin by calculating the cost of goods sold for Company A.

Which of the following represents the components of the income statement for a merchandising business? Select one: a. Service Revenue – Operating Expenses = gross profit b. Sales Revenue – Cost of Goods Sold = gross profit c. Service Revenue – Cost of Goods Purchased = gross profit d. Sales Revenue – Cost of Goods Manufactured = gross profit

Moving to another question will save this response. Question 4 Net Sales are calculated using: O A. Gross sales, cost of good available for sale, cost of goods sold O B. Gross sales, cost of goods sold, sales expenses C. Gross sales, cost of sales, purchases O D. Gross sales, sales returns & allowances, sales discount Moving to another question will save this response.

The difference between sales and marginal cost is______________ a. Fixed Cost b. Profit c. Sales price d. Contribution

Mark up can be calculated by the formula; a. Markup = Cost + Expenses b. Markup = Cost + Profit c. Markup = Selling price + Cost d. Markup = Expenses + Profit

Which of the following represents the components of the income statement for a merchandising business?   a.Service Revenue – Operating Expenses = gross profit b.Sales Revenue – Cost of Goods Sold = gross profit c.Service Revenue – Cost of Goods Purchased = gross profit d.Sales Revenue – Cost of Goods Manufactured = gross profit

Target cost = Selling price - ______________. a. Cost b. Profit margin c. Revenue d. Expenses

1. If the business purchases goods for resale purposes, such purchases are charged to?a. Expenses accountb. Sales accountc. Purchases accountd. None of the above 2. Costing information can be used for?a. Budget control and evaluationb. Determining standard costs and variancesc. Pricing and inventory valuation decisionsd. All of the above

Under the gross profit method, if the gross profit rate is based on cost, the cost of sales is computed as A. Gross sales times cost ratio B. Net sales divided by sales ratio C. Net sales times cost ratio D. Gross sales divided by sales ratio

EOQ

Consider the following transactions for DeTrees Company for the month shown in chronological order: Number of Units Unit Cost Sales 100 $66 Beginning inventory Purchased Sold 80 75 50 $120 Sold 25 125 Ending inventory 105 In the table below, calculate the dollar value for the period for each of the following items using the listed cost allocation methods and using perpetual inventory updating. PLEASE NOTE: All dollar amounts will be rounded to whole dollars using "$" with commas as needed (i.e. $12,345), except for the Weighted Average cost per unit, which will be rounded to two decimal places and include "$" (i.e. $12,345.67). ion

9. Which of the following is the correct computation for the cost of goods available for sale? a.Net Sales - Cost of Goods Sold b. Sales - Cost of Goods Sold c. Beginning Inventory + Net Purchases d. Net Purchases - Ending Inventory 10. This refers to the shipping cost necessary to bring inventory purchased from the seller to the premises of the company. a. Freight - In b. Freight - Out c. Delivery Expenses d. Travelling Expenses

SLO-5.1. for a merchandising business is determined by subtracting the Cost of Goods Sold from the Sale Income account. OOperating Income ONet Income OGross Profit OMerchandise Available for Sale

Compare and contrast the differences and similarities between Cost of Goods Sold and Net Profit. HTML Editor B IUA I E E E 這 x Vx T T 1 AL