Explanation Given Information: The necessary information for this problem: gross margin = 40 % beginning inventory = $ 178 , 400 net purchase = $ 91 , 200 net sales = $ 215 , 800 Formula used: Step 1: Relation between Goods available for sale with beginning inventory and net purchased is given by: Goods Available for Sale = Beginning Inventory + Net Purchased Step 2: Estimated cost of goods sold is given by: Estimated cost of goods sold = Net sales ( 100% − Gross margin% ) Step 3: Estimated ending inventory is given by: Estimated ending inventory = Goods available for sale − Estimated cost of goods sold Calculation: List the beginning inventory and purchases and calculate the goods available for sale. Add purchases and beginning inventory to determine goods available for sale at both cost and retail. Goods Available for Sale = Beginning Inventory ( November 1 ) + Net Purchased = $ 178 , 400 + $ 91 , 200 = $ 269 , 600 Now, find the estimated cost of goods sold by multiplying net sales by the cost of goods sold percent (complement of gross margin percent)

Contemporary Mathematics for Business and Consumers

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ISBN: 9781285189758

Author: Robert Brechner, George Bergeman

Publisher: Cengage Learning

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Chapter 16.II, Problem 4RE

To determine

To calculate: The cost of ending inventory for November, with the help of gross profit method. Given that Rambo Plumbing Supply maintains a gross margin of 40% on all its kitchen sinks and faucet sets. In November, Rambo had a beginning inventory of $178,400, net purchase of $91,200, and net sales of $215,800.

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Chapter 16 Solutions

Contemporary Mathematics for Business and Consumers

Ch. 16.I - You are the merchandise manager at Best Buy. The...Ch. 16.I - Prob. 2TIE Ch. 16.I - Prob. 3TIE Ch. 16.I - Prob. 4TIE Ch. 16.I - Prob. 1RE Ch. 16.I - Prob. 2RE Ch. 16.I - 3. Calculate the total number of units available...Ch. 16.I - When the merchandise manager of Advance Auto Parts...Ch. 16.I - Prob. 5RE Ch. 16.I - The following data represent the inventory figures...

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Finding Local Maxima and Minima by Differentiation; Author: Professor Dave Explains;https://www.youtube.com/watch?v=pvLj1s7SOtk;License: Standard YouTube License, CC-BY

The cost of ending inventory for November, with the help of gross profit method. Given that Rambo Plumbing Supply maintains a gross margin of 40% on all its kitchen sinks and faucet sets. In November, Rambo had a beginning inventory of $178,400, net purchase of $91,200, and net sales of $215,800.

Solution Summary: The author calculates the cost of ending inventory for November using the gross profit method. Rambo Plumbing Supply maintains a 40% gross margin on all its kitchen sinks and faucet sets.

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Chapter 16 Solutions