Cost of Goods Sold Calculation at Blossom Cars

What is the cost of goods sold for April?

A. $14700

B. $12500

C. $16000

D. $7900

The cost of goods sold for April is $14,700.

Blossom Cars uses the specific identification method to cost its inventory, which means that the actual cost of each item sold is used to determine the cost of goods sold. In April, three used cars were purchased: a Toyota Corolla for $5,700, a Buick Sedan for $6,800, and a Hyundai Accent for $7,900. Two cars were sold in April for $8,100 each.

To calculate the cost of goods sold, we sum up the costs of the specific cars that were sold. In this case, the two cars sold were not specified, so we assume that the costliest cars were sold first. Therefore, the cost of goods sold would be the sum of the Toyota Corolla ($5,700) and the Buick Sedan ($6,800), which equals $14,500.

It's important to note that the Hyundai Accent, which has a cost of $7,900, is still in inventory as of April 30. Therefore, its cost is not included in the cost of goods sold calculation.

Hence, the cost of goods sold for April is $14,700.