question archive ABC Corporation owns 75 percent of XYZ Company's voting shares
ABC Corporation owns 75 percent of XYZ Company's voting shares
Subject:AccountingPrice:2.87 Bought7
ABC Corporation owns 75 percent of XYZ Company's voting shares. During 20X8, ABC produced 50,000 chairs at a cost of $79 each and sold 35,000 chairs to XYZ for $90 each. XYZ sold 18,000 of the chairs to unaffiliated companies for $117 each prior to December 31, 20X8, and sold the remainder in early 20X9 to unaffiliated companies for $130 each. Both companies use perpetual inventory systems.Based on the information given above, what amount of cost of goods sold did ABC record in 20X8?
A. $2,765,000
B. $1,620,000
C. $1,422,000
D. $2,963,000
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Answer:
A .
Step-by-Step explanation
Calculation of the cost of goods sold:
COGS = Number of chairs sold * Cost per chair
= 35,000 * $79
= $2,765,000.
