On November 30, 2013, the General Ledger of Hinges and More

question 34

Short Answer

On November 30, 2013, the general ledger of Hinges and More Hardware, a retail store, showed the following balances: Purchases, $136,750; Freight In, $2,500; Purchases Returns and Allowances, $4,000. Determine the following:
A) What was the delivered cost of purchases for November?
B) What was the net delivered cost of purchases for November?

• A) What was the delivered cost of purchases for November?
• B) What was the net delivered cost of purchases for November?

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Definitions:

Margin of Safety

Margin of Safety is the difference between actual sales and the break-even point, indicating the amount of sales decline a company can sustain before incurring a loss.

CVP Income Statement

An income statement format that is used to analyze the impact of varying levels of sales and product costs on operating profit, focusing on the relationships between cost, volume, and profit.

Management Decision-Making

The process by which management identifies, evaluates, and chooses among alternative courses of action to achieve organizational objectives.

Traditional Income Statement

An income statement format that separates costs into categories of cost of goods sold and operating expenses to calculate net income.