MFL Sales expects to sell 400 units of Product A and 360 units of Product B each day at an average price of $20 for Product A and $26 for Product B.The expected cost for Product A is 36% of its selling price and the expected cost for Product B is 59% of its selling price.MFL Sales has no beginning inventory,but it wants to have a six-day supply of ending inventory for each product.Compute the budgeted cost of goods sold for the next (seven-day)week.(Round the answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

D) Cost of goods sold = (Selling price × % expected cost ) × units
Cost of goods sold:
Product A: ($20 × 36%) × (400 units × 7 days) = $20,160
Product B: ($26 × 59%) × (360 units × 7 days) = $38,657
Total cost of goods sold: $20,160 + $38,657 = $58,817

MFL Sales Expects to Sell 400 Units of Product a and 360