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3 years ago

Cost of goods sold

Business

2 answers:

never [62]3 years ago

8 0

Answer:

The correct option is d.

Explanation:

Cost of goods sold: The cost of goods sold is that cost which sells the product at the cost price. It is directly related to the production level.

Example: purchase price, raw material cost, labor cost, etc.

It includes administration costs but not include research and development cost.

Neither it is found on the balance sheet, it shows on the income statement.

Nor, it records partly completed goods because it has come under work in progress.

So, the A,B, and C are incorrect statements while D is the correct statements.

Hence, the correct option is d. Cost of goods sold is the total product cost for the units sold during a period.

Natalija [7]3 years ago

4 0

Answer:

The correct answer to the following question is option D) this is the total product cost for the units that are sold during a period .

Explanation:

COGS which is also know as cost of goods sold, can be described as the cost which is directly attributable to the production of products or goods that are sold by a company during a given period of time. In this cost we will include the material cost and direct labor cost which is incurred while producing the goods and indirect expenses like sales cost and distribution cost would not be included.

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3 years ago

A producer of felt-tip pens has received a forecast of demand of 31,000 pens for the coming month from its marketing department.

atroni [7]

Answer:

a. Break-even quantity: 28,000 pens

b. Price: $1.51 per pen

Explanation:

1. Break-even quantity

a) Revenue, R(x)

The monthly revenue is the product of the price by the number of units sold in the month.

Naming x the number of pens sold in the month:

R(x) = $1 × x = x

b) Cost, C(x)

The monthly cost is the sum of the fixed cost per month plus the variable costs:

C(x) = $21,000 + 0.25 × x = 21,000 + 0.25x

c) Break-even

Break-even is the point when the revenue and the total costs are equal, this is, when the profit is zero. Write the equation and solve:

x = 21,000 + 0.25x

x - 0.25x = 21,000

0.75x = 21,000

x = 21,000 / 0.75

x = 28,000

Hence, the break-even quantity is 28,000 pens.

2. Price pens must be sold to obtain a monthly profit of $18,000

Profit = Revenue - Total cost

P(x) = R(x) - C(x)

P(x) = x.p - [ 0.25x + 21,000]

Where p is the price.

P(x) = x.p - 0.25x - 21,000

Substitute the quantity demanded, x, with 31,000, and the profit, P(x) with 18,000:

18,000 = 31,000p - 0.25(31,000) - 21,000

Solve for p and compute:

31,000p = 18,000 + 7,750 + 21,000

31,000 p = 46,750

p = 1.51

That is $1.51 per pen.

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insens350 [35]

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