Chapter 6, Problem 22BQS

To determine

Introduction:

Gross Profit Ratio is the ratio of Gross profit to Sales, expressed as a percentage. Gross Profit is the difference between Sales and Cost of goods sold.

Cost of goods sold is the direct costs attributable to the production of goods sold in a concern. It includes cost of Materials used in creating the product as well as Direct Labor costs. It excludes indirect expenses like Distribution costs. It is often referred as Cost of Sales.

Cost of goods available for sale will be the summation of Opening Inventory and Purchases and subtracting Closing Inventory from them.

Cost of inventory destroyed will be the difference between Cost of goods available for sale and Cost of goods sold.

To determine:

Cost of the inventory destroyed for Confucius Bookstore’s inventory