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In the post acquisition period Systan’s sales to Hydan were $30 million on which Systan had made a
consistent profit of 5% of the selling price. Of these goods, $4 million (at selling price to Hydan) were still in the inventory of Hydan at 31 March 20X6. Prior to its acquisition Systan made all its sales at a uniform gross
profit margin.My issue with the question is the ‘at sp to hydan’…I thought it should have been at cost to hydan..please confirm…? the answer from the bpp txt is 200,000 for URP
“Selling price to Hydan” means “at the price for which the goods were sold on the occasion of the sale to Hydan” …. get used to this type of wording because the examiner is likely to continue to use the expression. He has included the words “to Hydan” in an effort to make the question completely unambiguous. Clearly, his attempt hasn’t worked!
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