CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

The goods available for sale, at retail prices, total $200,000. If the cost ratio for the period totals 60% and the net sales at retail for the period total $120,000, what is the ending inventory at cost?
A. $48,000
B. $24,000
C. $72,000
Explanation: Reducing total goods available for sale at retail ($200,000) by sales at retail ($120,000) leaves a remainder (ending inventory at retail) of $80,000. If the cost of the ending inventory is 60% of ending inventory at retail value, the cost of the ending inventory at cost is $48,000 ($80,000 x 60%).

User Contributed Comments 2

User Comment
Paulvw Read the question: Goods available for sale *at retail*.
praj24 FFS!
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