Calculate the Cost of Goods Sold for a Merchandiser Using

question 85

Multiple Choice

Calculate the cost of goods sold for a merchandiser using the periodic inventory system from the following details. $$\begin{array} { | l | r | } \hline \text { Purchases } & \$ 500,000 \\\hline \text { Beginning Merchandise Inventory } & 175,000 \\\hline \text { Purchase Returns and Allowances } & 50,000 \\\hline \text { Purchase Discounts } & 12,000 \\\hline \text { Freight In: } & 15,000 \\\hline \text { Ending Merchandise Inventory } & 150,000 \\\hline\end{array}$$

• A) $500,000
• B) $478,000
• C) $490,000
• D) $625,000

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Definitions:

Processing Department

A division within a manufacturing operation where a specific operational task is performed, such as mixing, cooking, or packaging.

Process Costing System

An accounting method used to assign costs to units of production in continuous processes, where similar items are produced.

Weighted-Average Method

An inventory costing method that assigns the cost of goods available for sale based on the weighted average cost of those goods during the period.

Processing Department

A processing department is a division within a manufacturing operation where a specific type of process or series of operations is performed on products.