Question

You are working a floor manager of the hosiery department in Betty's Fashion House. You have purchased items which are invoiced at $38,000 that carry a freight charge of $347 and the cost $150 from a particular vendor to set out on the sales floor. The vendor has issued the terms of payment at 2/10 net 30 and you intend to pay within 10 days to benefit from the 2 percent discount.

Answer 1

COGS= Billed Cost + Freight + Workroom or Alteration Cost - Cash Discount

=38000+347+150- (2% of 38000)
= 38,496.98 or $ 38,497