Question

A sporting equipment store expects to purchase $7,500 of ski boots in October. The store had $3,500 of ski boots in merchandise inventory at the beginning of October, and expects to have $2,500 of ski boots in merchandise inventory at the end of October to cover part of anticipated November sales. What is the budgeted cost of goods sold for October? A. $7,500 B. $10,000 C. $8,500 D. $11,000 E. $6,000,

Answer 1

C. $8,500

Step-by-step explanation:

The formula to compute the budgeted cost of goods sold is shown below:

= Merchandise inventory at the beginning of October + purchase made - Merchandise inventory at the ending of October

= $3,500 + $7,500 - $2,500

= $8,500

We simply added the beginning inventory and deduct the ending inventory to the purchase amount so that the accurate value can come