Carla sells hot coffee, cider and tea from a sidewalk cart near Wall Street in New York City. Last month she sold $4,500 worth of product to 1,000 customers. She spent $800 on buying her beverages in bulk. Her monthly costs are: Utilities = $100, Salary = $2,000, Advertising = $0, Insurance = $0, Interest = $0, Rent (cart) = $500, Depreciation = $0. What is Carla's monthly cost of goods sold?
A) $800
B) $600
C) $450
D) $100

Question

Quizplus · Accepted Answer

Cost of goods sold = total expenses related to producing and selling the products.

Total revenue = $4,500
Number of customers = 1,000

Therefore, revenue per customer = $4.50

Cost of goods sold = cost of beverages + any other costs directly related to producing the products.

Cost of beverages = $800 (given in the question)

Therefore, cost of goods sold = $800

(Note: None of the other expenses listed are directly related to producing the products, so they are not included in the calculation of cost of goods sold.)

Carla Sells Hot Coffee, Cider and Tea from a Sidewalk