Use the Following Information Regarding Black Company and Red Company

question 68

Multiple Choice

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Red Company's "cost of goods sold" for 2017 (to the closest dollar) ?" $\begin{array}{l}\begin{array}{|l|c|c|c|}\hline & \text { Year } & \begin{array}{c}\text { Inventory } \\\text { Turnover }\end{array} & \text { Ending Inventory } \\\hline \text { Black Company } & 2015 & & \$ 26,340 \\\hline & 2016 & 8.7 & \$ 29,890 \\\hline & 2017 & 8.2 & \$ 30,100 \\\hline\\\hline \text { Red Company } & 2015 & & \$ 25,860 \\\hline & 2016 & 7.0 & \$ 24,750 \\\hline & 2017 & 7.5 & \$ 22,530 \\\hline\end{array}\end{array}$

• A)$260,043
• B)$189,788
• C)$168,975
• D)$177,300

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Definitions:

Import Quota

A government-imposed limit on the quantity or value of goods that can be imported into a country.

Deflationary

Pertains to a period when the general price levels in an economy are falling, which can increase the real value of money.

Tariffs

Taxes imposed by a government on imported goods, often used to protect domestic industries and regulate trade balances.

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity.