Calculate sales using inventory turnover and gross profit

Steps:

• Closing inventory = $30,000; inventory increased 50$30,000 / 1.5 = $20,000.
• Average inventory = ($20,000 +$30,000) / 2 = $25,000.
• Inventory turnover = 8 = COGS / average inventory, so COGS = 8 × $25,000 =$200,000.
• Sales revenue = COGS + gross profit = $200,000 +$200,000 = $400,000.

Why B is correct:

• Matches the formula: sales = COGS + gross profit, where COGS = turnover rate × average inventory.

Why the others are wrong:

• A: Assumes COGS = $100,000, understating turnover rate.
• C: Confuses gross profit with sales or misapplies inventory data.
• D: Likely miscalculates average inventory or applies percentage increase incorrectly.

Final answer: B