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Homework answers / question archive / The following information is available for Sweden Company for its most recent year: Net sales              $3,600,000 Freight-in                   90,000 Purchase discounts     50,000 Ending inventory       240,000 The gross margin is 40% of net sales

The following information is available for Sweden Company for its most recent year: Net sales              $3,600,000 Freight-in                   90,000 Purchase discounts     50,000 Ending inventory       240,000 The gross margin is 40% of net sales

Finance

The following information is available for Sweden Company for its most recent year:

Net sales              $3,600,000

Freight-in                   90,000

Purchase discounts     50,000

Ending inventory       240,000

The gross margin is 40% of net sales. What is the cost of goods available for sale?

A) $1,680,000

B) $1,920,000

C) $2,400,000

D) $2,440,000

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Computation of the cost of goods available for sale:-

Gross profit = Net sales * Gross margin percentage

= $3,600,000 * 40%

= $1,440,000

Cost of good sold = Net sales - Gross profit

= $3,600,000 - $1,440,000

= $2,160,000

Cost of goods available for sale = Cost of goods sold + Ending inventory

= $2,160,000 + $240,000

= $2,400,000

Hence, the correct option is C) $2,400,000

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