Hygeia Health 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. Hygeia Health 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) $77,606
Cost of goods sold = (Selling price × % expected cost ) × units
Cost of goods sold:
Product A: ($15 × 38%) × (460 units × 7 days) = $18,354
Product B: ($33 × 57%) × (450 units × 7 days) = $59,252
Total cost of goods sold: $18,354 + $59,252 = $77,606
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