Andover Inc. had a gross margin for the month of February totaling $42,000. They sold 5,000 units during the month at a sales price of $20 per unit. What was the amount of cost of goods sold for the month?
A) $100,000
B) $42,000
C) $58,000
D) none of these are correct

Question

Quizplus · Accepted Answer

We can use the formula:

Gross Margin = Sales - Cost of Goods Sold

Plugging in the given values, we get:

$42,000 = ($20 x 5,000) - Cost of Goods Sold

Simplifying, we get:

$42,000 = $100,000 - Cost of Goods Sold

Rearranging, we get:

Cost of Goods Sold = $100,000 - $42,000 = $58,000

Therefore, the amount of cost of goods sold for the month was $58,000, which is option C.