Pearson Edexcel IGCSE · Commerce
1 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Commercial calculations.
A company provided the following information regarding its inventory for the last financial year:
Opening inventory: \$15,000\)
Closing inventory: \$25,000\)
Cost of goods sold: \$120,000\)
Calculate the inventory turnover for the year.
A retailer buys a product for \( \$40 \) and sells it for \( \$60 \). Calculate the mark-up percentage for this product.
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Calculate the inventory turnover (number of times) if the cost of goods sold is \( \$150,000 \), the opening inventory is \( \$22,000 \), and the closing inventory is \( \$28,000 \).
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A business has an opening inventory of \( \$5,200 \) and a closing inventory of \( \$6,800 \). Calculate the average inventory value.
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A business sells a product for \(\$150\). The cost price of the product was \(\$120\).
Part A: Calculate the mark-up percentage.
Part B: Calculate the gross profit margin percentage.
Part C: Explain the difference between 'mark-up' and 'margin' in a commercial context.
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Part A: A business has a turnover (sales) of \(\$600,000\) and an average inventory of \(\$75,000\). Calculate the inventory turnover in terms of sales (Note: use turnover for the calculation as cost of sales is not provided).
Part B: If the business reduces its average inventory to \(\$50,000\) while keeping turnover the same, calculate the new turnover ratio.
Part C: Explain how reducing average inventory improves the financial position of the business.
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