MFL Sales expects to sell 460 units of Product A and 450 units of Product B each day at an average price of $15 for Product A and $33 for Product B The expected cost for Product A is 38% of its selling price and the expected cost for Product B is 57% of its selling price. MFL Sales has no beginning inventory, but it wants to have a six-day supply of ending inventory for each product. Compute the budgeted cost of goods sold for the next (seven-day) week. (Round the answer to the nearest dollar.)
A) $67,032
B) $66,519
C) $130,500
D) $77,606
D .D) Cost of goods sold = (Selling price x % expected cost ) x units
Cost of goods sold:
Product A: ($15 x 38%) x (460 units x 7 days) = $18,354
Product B: ($33 x 57%) x (450 units x 7 days) = $59,252
Total cost of goods sold: $18,354 + $59,252 = $77,606
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