Company A spends $250 million purchasing materials and subassemblies that it processes and sells for a total of $350 million. The cost of goods sold by Company A is $350 million.

Question

Quizplus · Accepted Answer

The cost of goods sold would be the cost of the materials and subassemblies plus the cost of processing those materials. In this case, the cost of goods sold should be $250 million (the cost of purchasing materials) plus the cost of processing those materials. Since we don't know the cost of processing, we can't determine the total cost of goods sold. Therefore, it's not accurate to say that the cost of goods sold is $350 million.

Company a Spends $250 Million Purchasing Materials and Subassemblies That