Answer:
The correct answer is letter "C": shortage costs increase as total carrying costs increase.
Explanation:
A shortage takes place when the quantity demanded is higher than the supply at the current price. Typically, shortages occur because of an increase in demand, a decrease in supply or due to government policies. Shortage costs are those costs a firm is responsible for because the is no enough stock in its inventory. When shortage costs increase, the carrying costs do not necessarily increase.
Answer: Cost of goods sold = $62500
Explanation:
Given that,
Sales revenue = $183,000
Ending inventory = $12,600
Beginning inventory = $15,600
purchases = $64,000
purchases discounts = $4,000
purchase returns and allowances = $1,500
freight-in = $1,000
freight-out = $500
Cost of goods sold = Beginning inventory + purchases - purchases discounts - purchase returns and allowances + freight-in - Ending inventory
= $15,600 + $64,000 - $4,000 - $1,500 + $1,000 - $12,600
= $62500