PC Connection is a leading mail order retailers of personal computers. A recent financial report issued by the company revealed the following information:
Merchandise inventory (beginning of year) $77 million
Merchandise inventory (end of year) $70million
Net Sales for the year $2.15 billion
Gross profit margin 13%
- A. Compute the company’s cost of goods sold for the year
- B. Approximately how much inventory did PC Connection purchase during the year?
- C. What factors might contribute to the company’s low gross profit margin?
- D. Discuss reasons why PC Connection uses a perpetual inventory system.