Prime Retailers (PR), a US-based distributor of men’s shirts, has a policy of marking its merchandise up by $5 per unit. At the beginning of 2009, PR had 10,000 units of inventory on hand, which cost $15 per unit. During 2009, PR purchased 100,000 units of inventory at a cost of $22 per unit. Also during 2009, PR sold 100,000 units of inventory at $27 per unit. How shall PR refl ect the cost of the inventory sold: $15 or $22 or some combination?
Prime Retailers (PR), a US-based distributor of men’s shirts, has a policy of marking its merchandise up by $5 per unit. At the beginning of 2009, PR had 10,000 units of inventory on hand, which cost $15 per unit. During 2009, PR purchased 100,000 units of inventory at a cost of $22 per unit. Also during 2009, PR sold 100,000 units of inventory at $27 per unit. How shall PR refl ect the cost of the inventory sold: $15 or $22 or some combination?
As question provides that Prime Retailer (PR) , a US based distributor of mes's shirts has a policy of add mark-up by $ 5 per unit. it means prime retailer is taking profit $ 5 per unit on cost price per shirt.
Therefore Prime Retailer sold , purchased 100000 units in 2009, not 10000 units held at beginning of 2009.
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