Cooking Corner Cooking Corner Reported Inventory on Its Balance Sheet at December

question 147

Essay

Cooking Corner

Cooking Corner reported inventory on its balance sheet at December 31, 2016 at $32,000. During 2017, Cooking Corner purchased goods totaling $634,000 on account with terms of 2/10, n/30, FOB shipping point. Total charges paid by Cooking Corner directly to the freight company were $1,000. At the end of 2017, inventory on hand totaled to $45,000. Net sales for 2017 totaled $1,300,000. Cooking Corner employs a periodic inventory system.

-Refer to the information for Grappa,Inc.

What amount is cost of goods available for sale for 2018?

---

Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating a company's fixed versus variable costs.

Variable Costs

Expenses that change in proportion to the level of production or sales, such as raw materials and labor costs.

Operating Leverage

Operating leverage describes the extent to which a company can increase profits by increasing sales, indicating the proportion of fixed costs to variable costs.

Break-Even Point

The level of output or sales at which a company does not make a profit or loss, but all costs are covered.