How to calculate gross margin

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Question 1)Assume that $15,000 of inventory will be sold in week 2, and the gross margin is now 40%. (you might need to lookup how to calculate gross margin. I show it in the lecture). For clarity, $15,000 is what you paid for the goods.

Question 2) The amount of inventory is depleted by $12,000 each week for the following three weeks. Sales proportion of credit vs. cash will be 60% cash vs 40% credit. For simplicity, assume sales are made on the first day of the week. You might need to replenish inventory at times.

Question 3) Add a weekly expense of $3,000 for wages and other expenses. This will be paid from the cash account at the end of each week.

Question 4) The receivables will arrive 2 weeks after being sold. The inventory purchases (payables) are due 1 week after being purchased.

 

Reference no: EM133551020

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