Question

*17) For January, budgeted cost of goods sold is ________.*

A) $200,000
B) $140,000
C) $126,000
D) $112,000
Objective 6.A

Answer 1

For January, budgeted cost of goods sold is $200,000. (Option A)

Step-by-step explanation:

The budgeted cost of goods sold (COGS) is a crucial component in financial planning and is calculated using the formula:

Budgeted COGS = Budgeted Beginning Inventory + Budgeted Purchases - Budgeted Ending Inventory

This formula considers the starting inventory, purchases made during the period, and the anticipated ending inventory. It helps estimate the cost of goods that will be sold during the specified time frame.

In this context, the correct answer is A) $200,000. This figure indicates that, based on the budgeted values, the company expects the cost of goods sold in January to be $200,000.

Accurate budgeting of the COGS is vital for businesses to manage their expenses, set pricing strategies, and project profits. It provides a foundation for decision-making and financial control, allowing companies to align their resources effectively with expected sales.

Understanding and utilizing budgeted COGS assists businesses in maintaining profitability and sustainability by aligning production and sales forecasts with financial goals.(Option A)