bit busy today but a promise is a promise so how about getting your teeth into this one which is another play on markups and margins but with a twist.
A business sells goods earning a constant 25% markup.
Sales in the period amount to £500,000
Opening Stock was £100,000
Closing Stock was £20,000.
Purchases were £450,000.
The owner suspects theft.
Calculate the amount of the stock losses.
Have fun people!
-- Edited by Shamus on Friday 16th of April 2010 11:44:25 AM
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I must be making a fundamental friday error then! I worked on the basis that it took £400,000 stock to generate £500,000 sales with a mark up of 25%. There has been £530,000 of stock used (100k+450k-20k), and the difference is 130k.
Sorry, I've mistyped the question. you were right Rob!
I thought that I'd typed £10,000 opening stock which made the answer £40,000... Doh
For anyone else having a problem with this the full answer is :
(1) Calculate what cost of sales should have been. 25% markup = 20% margin So, gross profit = 500,000 * 20% = £100,000 Therefore, cost of sales must have been £400,000 (500k - 100k)
(2) Calculate what cost of sales actually was Opening stock was £100,000 (!!! Ooops) Closing stock was £20,000
(3) Calculate the variance Therefore cost of sales should have been 100k + 450k 20k = £530,000 So, losses = 530,000 - 400,000 = 130,000
So sorry Rob, you were completely correct and I got the question wrong!!!
-- Edited by Shamus on Friday 16th of April 2010 12:23:54 PM
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Ruth and Rob both get gold stars and I get to sit up the corner with a dunces cap on for both mistyping it and being number blind when I reviewed what I'd written!
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Ruth and Rob both get gold stars and I get to sit up the corner with a dunces cap on for both mistyping it and being number blind when I reviewed what I'd written!
I'll be sat in the other corner wearing my dunces cap but reading bookkeeping books to make sure I don't get it wrong again.
I think you learn more from mistakes. I've seen people on here asking for answers to assigmnents and thought it was pointless - I tend to put in what I think is correct and then when it comes back the actual correct answer it sticks in my brain more.
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Never buy black socks from a normal shop. They shaft you every time.
just have a go at the next one and I'm sure that you'll redeem yourself.
It's closely linked to this question but again adds another aspect to it.
And besides that I've actually typed the correct figures in for the answer that I've got on the other one!
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Back from the bank and a bit relieved! I nearly asked if the opening/closing stock figures were right! I'll sit out the next question (i'll have a go and post my answer if no-one sticks their neck out!)
just have a go at the next one and I'm sure that you'll redeem yourself.
I'll try it later on tonight - need to out and buy milk now. So far in 2010 I have spent £37.59 buying 94.816 litres of milk. This is worrying that I know this.
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Never buy black socks from a normal shop. They shaft you every time.
Without any further exams I'm pretty sure that we all agree that you've passed the final test as to whether you are ready to be an accountant!
Bet that you've also calculated the stock days ratio and economic order quantity on that haven't you! lol
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I only calculate how much I was buying (cost and litres) per day. I have been buying less now even when it is cheaper. I was buying 1.5 litres per day costing me £1.02 now I'm buying under 1 litre per day and it is costing me 38p a day.
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Never buy black socks from a normal shop. They shaft you every time.
