Answer: C
Explanation: Cost of goods sold = Beginning merchandise inventory + Purchases of merchandise inventory − Ending merchandise inventory
= $46,000 + $128,000 − $52,000
= $122,000
Difficulty: 1 Easy
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
266) Streif Inc., a local retailer, has provided the following data for the month of June:
Merchandise inventory, beginning balance
$
46,000
Merchandise inventory, ending balance
$
52,000
Sales
$
260,000
Purchases of merchandise inventory
$
128,000
Selling expense
$
13,000
Administrative expense
$
40,000
The net operating income for June was:
A) $132,000
B) $126,000
C) $85,000
D) $79,000
Answer: C
Explanation: Net operating income = Sales − Cost of goods sold − Selling and administrative expenses
= $260,000 − $122,000 − ($13,000 + $40,000)
= $85,000
Difficulty: 1 Easy
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
267) Boersma Sales, Inc., a merchandising company, reported sales of 7,100 units in September at a selling price of $682 per unit. Cost of goods sold, which is a variable cost, was $317 per unit. Variable selling expenses were $44 per unit and variable administrative expenses were $22 per unit. The total fixed selling expenses were $157,200 and the total administrative expenses were $338,000.
The contribution margin for September was:
A) $3,878,400
B) $2,122,900
C) $2,591,500
D) $1,627,700
Answer: B
Explanation:
Sales (7,100 units × $682 per unit)
$
4,842,200
Variable expenses:
Cost of goods sold (7,100 units × $317 per unit)
$
2,250,700
Variable selling expense (7,100 units × $44 per unit)
312,400
Variable administrative expense (7,100 units × $22 per unit)
156,200
2,719,300
Contribution margin
$
2,122,900
Difficulty: 2 Medium
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
268) Boersma Sales, Inc., a merchandising company, reported sales of 7,100 units in September at a selling price of $682 per unit. Cost of goods sold, which is a variable cost, was $317 per unit. Variable selling expenses were $44 per unit and variable administrative expenses were $22 per unit. The total fixed selling expenses were $157,200 and the total administrative expenses were $338,000.
The gross margin for September was:
A) $2,122,900
B) $2,591,500
C) $1,627,700
D) $4,347,000
Answer: B
Explanation:
Sales (7,100 units × $682 per unit)
$
4,842,200
Cost of goods sold (7,100 units × $317 per unit)
2,250,700
Gross margin
$
2,591,500
Difficulty: 2 Medium
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
269) Delongis Corporation, a merchandising company, reported the following results for June:
Number of units sold
1,200
units
Selling price per unit
$
221