To determine the cost of goods sold (COGS) for the gift shop over a specific period, we need to follow several steps. Here is a detailed, step-by-step solution:
1. Calculate Total Cost of Additional Inventory Purchased:
- For Puzzles:
- Cost per puzzle = \[tex]$15.00
- Number of puzzles purchased = 10
- Total cost for puzzles = $[/tex]15.00 \times 10 = \[tex]$150.00
- For Shirts:
- Cost per shirt = \$[/tex]18.00
- Number of shirts purchased = 15
- Total cost for shirts = [tex]$18.00 \times 15 = \$[/tex]270.00
- For Key Chains:
- Cost per key chain = \[tex]$5.50
- Number of key chains purchased = 20
- Total cost for key chains = $[/tex]5.50 \times 20 = \[tex]$110.00
- Sum all these total costs to get the total additional inventory purchased:
- Total additional inventory = \$[/tex]150.00 (puzzles) + \[tex]$270.00 (shirts) + \$[/tex]110.00 (key chains) = \[tex]$530.00
2. Calculate the Cost of Goods Available for Sale:
- Begin with beginning inventory value:
- Beginning inventory = \$[/tex]10,500
- Add the total cost of additional inventory purchased:
- Total additional inventory = \[tex]$530.00
- Total cost of goods available for sale = \$[/tex]10,500 + \[tex]$530.00 = \$[/tex]11,030.00
3. Determine the Ending Inventory Value:
- Ending inventory value = \[tex]$1,500
4. Calculate the Cost of Goods Sold (COGS):
- Use the formula:
- COGS = Cost of goods available for sale - Ending inventory
- Plug in the values:
- COGS = \$[/tex]11,030.00 - \[tex]$1,500 = \$[/tex]9,530.00
Therefore, the cost of goods sold (COGS) for the gift shop over this period is \$9,530.00.
