The Limak Corporation had 6,000 chairs on hand at the beginning of March. Each c

Question

The Limak Corporation had 6,000 chairs on hand at the beginning of March. Each chair had cost the company $30. The company purchased 30,000 chairs during March at a cost of $30 each. The company's inspection of its purchases revealed 100 defective chairs, which the company returned to its supplier for full credit of $30 each. The company sold 32,000 chairs during March and charged its customers $70 per chair. Determine the company's cost of goods sold for March. Hint: FIFO and LIFO perpetual inventory methods will result in the same answer for this problem. a. $2,240,000 b. $963,000 c. $117,000 d. $960,000

Explanation / Answer

The company sold 32,000 chairs during the year. The cost of opening stock and purchase of chairs is $30. Cost of goods sold = $32,000*30 = $960,000.

Correct answer = b. $960,000

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