Multiple Choice
Which of the following statements is correct regarding the calculation of Cost of Goods Sold (COGS) under the perpetual and periodic inventory systems?
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
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A grocery store sells a bag of 3 oranges for $0.96. If you want to buy 4 oranges, assuming the price per orange remains the same, how much would it cost?
A
$1.92
B
$1.00
C
$1.28
D
$0.96
Verified step by step guidance1
Step 1: Determine the price per orange by dividing the total cost of 3 oranges ($0.96) by the number of oranges (3). Use the formula: .
Step 2: Calculate the price per orange using the division from Step 1.
Step 3: Multiply the price per orange obtained in Step 2 by the number of oranges you want to buy (4). Use the formula: .
Step 4: Perform the multiplication to find the total cost for 4 oranges.
Step 5: Verify the calculation to ensure the total cost matches the expected result of $1.28.
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