If velocity of stock is 2 months, annual sales amount to rs.6 lakh at 20% gross profit margin and opening stock is rs.60,000; what is the closing stock value?
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Add the cost of beginning inventory plus the cost of purchases during the time frame = the cost of goods available for sale. Multiply the expected gross profit percentage by sales during the time period = the estimated cost of goods sold. Subtract the number from Step 1 minus the number from Step 2 = ending inventory.
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Explanation:IT WOULD BE SOLVED USING 2 FORMULAS : FIRST ONE STOCK TURNOVER RATIO AND SECOND ONE STOCK VELOCITY FORMULA AS MENTIONED BELOW IN PHOTO .
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