Accounting Multiple Choice Question – 6 April 2023

The master budget of Alex plc is being prepared.

The following information is available.

• budgeted sales – £800,000
• budgeted purchases – £620,000
• opening Inventory – £30,000
• budgeted mark-up one third

What is the cost of the budgeted closing inventory?

Select ONE answer:

1. £20,000
2. £30,000
3. £50,000
4. £80,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – If mark-up 33.3% then COS = £800k / 1.33333333333 = £600k therefore £30k + £620k – £50k
4. Not correct

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