Question

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.)

Answer 1

COGS= $58,816.8

Step-by-step explanation:

Giving the following information:

MFL Sales expects to sell:

400 units of Product A

360 units of Product B

Selling price:

Product A= $20

Product B= $26

Cost:

Product A is 36% of its selling price= $7.2

Product B is 59% of its selling price= $15.34

It wants to have a six-day supply of ending inventory for each product.

COGS= unitary cost* units sold

COGS= (7.2*400*7) + (15.34*360*7)= $58,816.8