Businesses which sell goods aim to derive a profit on the items they sell. The accounting term for the items which a business sells is "inventory." The term "gross profit" denotes the price received for the sale of goods less the cost of the goods sold. The cost of goods sold can be calculated in a number of ways. The price paid to purchase inventory can fluctuate up or down depending on market conditions. Since it is possible to have inventory on hand for sale that was purchased at different times and costs, it is important to have a consistent method of valueing the inventory to accurately judge a business's performance.
In this exercise you can specify the cost of inventory purchases, the sales markup and the inventory valuation method to observe the effect on cost of goods sold and gross profit.

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