Asked by Ethan Calura on Apr 28, 2024
Verified
For the year 2015,the gross profit of Alpha Company was $80,000;the cost of goods manufactured as $400,000;the beginning inventories of goods in process and finished goods were $28,000 and $50,000,respectively;and the ending inventories of goods in process and finished goods were $38,000 and $75,000,respectively.
Required:
What is the dollar amount of Alpha's sales for 2015?
Gross Profit
The difference between the revenue generated from sales and the cost of goods sold, excluding operating expenses, interest, and taxes.
Cost Of Goods Manufactured
The total production cost of goods that were completed during a specific accounting period, including labor, material, and overhead costs.
Finished Goods
Products that have completed the manufacturing process but have not yet been sold or distributed to the end customer.
- Detect and rectify mistakes in valuing inventory and grasp the consequences on financial records.
Verified Answer
Since cost of goods manufactured is specified,there is no need to analyze work in process inventory.
Solve for cost of goods sold:$50,000 + $400,000 - X = $75,000
X = $375,000
After finding cost of goods sold,solve for sales using this figure and the gross profit amount given.Gross profit is the difference between sales revenue and cost of goods sold.So to find sales,add cost of goods sold to gross profit.Sales in 2015 would be:
$375,000 + $80,000 = $455,000
Learning Objectives
- Detect and rectify mistakes in valuing inventory and grasp the consequences on financial records.
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