Question 1. At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate must be
a. $1,000,000 and 50%
b. $1,400,000 and 30%
c. $1,000,000 and 30%
d. $1,400,000 and 70%
Question 2: An aircraft company would most likely have a
a. high inventory turnover.
b. low profit margin.
c. high volume.
d. low inventory turnover.