Question

Clover Hardware sold a range of products. A few weeks ago, orders arrived for the garden center and outdoor living areas. 500 grills, purchased at a cost of $75 each, were distributed among 10 locations. 200 were sold for $175 each across all locations. The cost of goods sold totals:__________.

a.) $37,500
b.) $2,500
c.) $35,000
d.) $15,000

Answer 1

The correct answer is $15,000

Step-by-step explanation:

EXAMPLE ONLY FOR CALCULATIONS

Cost of Goods Sold Example

Available Purchase 1,000 couches for $100 each 1,000 X $100 = $100,000

Sold Sold 500 couches for $200 each 500 X $200 = $100,000

Cost of Goods Sold Sold 500 couches that originally cost $100 each 500 X $100 = $50,000

Answer 2

a. $37,500

Step-by-step explanation:

The formula for cost of goods sold is

Cost of goods sold = Opening stock + Purchases - Closing stock

Here, we were given the value of purchases only, which is $37,500

Therefore, cost of goods sold would be

= 500 grills purchased × cost of $75 each

Cost of goods sold = $37,500