Multiple Choice
Total manufacturing costs include direct materials, direct labor, plus:
27
views
4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
A company uses the perpetual inventory system. At the end of the period, the following information is available: Beginning Inventory = $5,000$, Purchases = $12,000$, Ending Inventory = $4,000$. What is the Cost of Goods Sold (COGS) for the period?
A
$13,000$
B
$17,000$
C
$9,000$
D
$21,000$
Verified step by step guidance1
Step 1: Understand the formula for Cost of Goods Sold (COGS) under the perpetual inventory system. The formula is: \( \text{COGS} = \text{Beginning Inventory} + \text{Purchases} - \text{Ending Inventory} \).
Step 2: Identify the values provided in the problem: \( \text{Beginning Inventory} = \$5000 \), \( \text{Purchases} = \$12000 \), and \( \text{Ending Inventory} = \$4000 \).
Step 3: Substitute the values into the formula: \( \text{COGS} = \$5000 + \$12000 - \$4000 \).
Step 4: Perform the addition first: \( \$5000 + \$12000 \).
Step 5: Subtract \( \$4000 \) from the result of the addition to calculate the Cost of Goods Sold.
3:41mWatch next
Master Cost of Goods Sold:Perpetual Inventory with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory practice set
Problem sets built by lead tutorsExpert video explanations