Question: Find the cost of goods sold if sales total $78,627 for the inventory table shown.
Date of purchase
Beginning inventory
February 5
February 19
March 3
Goods available for
sale
Units sold
Ending inventory
Units
purchased
42
21
15
28
106
81
25
Cost per
unit
$840
$1,750
$965
$470
Total
cost
$35,280
$36,750
$14,475
$13,160
$99,665
Retail price
per unit
$985
$2,125
$2,016
$590
Total retail
value
$41,370
$44,625
$30,240
$16,520
$132,755
1. **State the problem:** We need to find the cost of goods sold (COGS) given total sales of $78,627 and the inventory data.
2. **Understand the data:**
- Total units available for sale = 106 units
- Units sold = 81 units
- Ending inventory = 25 units
- Total cost of goods available for sale = $99,665
- Total retail value of goods available for sale = $132,755
3. **Formula for COGS using retail method:**
$$\text{Cost of Goods Sold} = \text{Goods Available for Sale at Cost} - \text{Ending Inventory at Cost}$$
4. **Calculate the cost-to-retail ratio:**
$$\text{Cost-to-Retail Ratio} = \frac{\text{Goods Available for Sale at Cost}}{\text{Goods Available for Sale at Retail}} = \frac{99665}{132755} \approx 0.75$$
5. **Calculate ending inventory at retail:**
$$\text{Ending Inventory at Retail} = \text{Goods Available for Sale at Retail} - \text{Sales} = 132755 - 78627 = 54128$$
6. **Calculate ending inventory at cost:**
$$\text{Ending Inventory at Cost} = \text{Ending Inventory at Retail} \times \text{Cost-to-Retail Ratio} = 54128 \times 0.75 = 40596$$
7. **Calculate COGS:**
$$\text{COGS} = 99665 - 40596 = 59069$$
**Final answer:**
The cost of goods sold is **$59069**.