Multiple Choice
In inventory management, which cost is directly dependent on the order quantity when calculating the Cost of Goods Sold under both perpetual and periodic inventory systems?
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
Multiple Choice
Given the following data for Scurry Company:- Beginning Inventory: \$5,000- Purchases: \$12,000- Ending Inventory: \$4,000What is the Cost of Goods Sold (COGS) under the periodic inventory system?
A
\$17,000
B
\$16,000
C
\$13,000
D
\$12,000
Verified step by step guidance1
Step 1: Understand the formula for Cost of Goods Sold (COGS) under the periodic inventory system. The formula is: COGS = Beginning Inventory + Purchases - Ending Inventory.
Step 2: Identify the values provided in the problem. Beginning Inventory is \$5,000, Purchases are \$12,000, and Ending Inventory is \$4,000.
Step 3: Substitute the values into the formula. Using MathML, the formula becomes: . Substituting the values: .
Step 4: Perform the addition and subtraction operations in the formula. First, add Beginning Inventory (\$5,000) and Purchases (\$12,000), then subtract Ending Inventory (\$4,000).
Step 5: The result of the calculation will give you the Cost of Goods Sold (COGS). Ensure you understand how each component contributes to the final value.
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