Question

You are buyer in your company's procurement department and have been able to secure a 5% reduction in cost from your supplier Current Financial Information Net Income = $5,658,000 Cost of Goods Sold = $18,038,000 Materials Cost = 85% of COGS Current Assets = $10,151,000 Inventory = $2,290,000 Total Assets = $34,628,000 What is the new Cost of Goods Sold after the 5% reduction in cost from your supplier?

Answer 1

$17,136,100

Step-by-step explanation:

Calculation of the new Cost of Goods Sold

Cost of Goods Sold = $18,038,000

Less 5% reduction ($18,038,000 × 5 %) = ($901,900)

New Cost of Goods Sold = $17,136,100