Winding Bridges Golf Shop allocated 16% of its $365,000 retail sales forecast to woods. Based on a 65% COGS, what was the estimated cost of the woods?

Winding Bridges Golf Shop allocated 16% of its $365,000 retail sales forecast to woods. Based on a 65% COGS, what was the estimated cost of the woods?

• A. 58,400
• B. 46,200
• C. 37,960
• D. 29,920

Answer: (C)

This question tests converting a forecasted sales allocation into an estimated cost using the COGS percentage. First find the dollar amount allocated to woods: 16% of $365,000 equals $58,400. The cost tied to those woods is 65% of that wood-sales amount, since COGS is the percentage of sales that represents cost of goods sold. So $58,400 × 0.65 = $37,960. Therefore, the estimated cost of the woods is $37,960.

This question tests converting a forecasted sales allocation into an estimated cost using the COGS percentage. First find the dollar amount allocated to woods: 16% of $365,000 equals $58,400. The cost tied to those woods is 65% of that wood-sales amount, since COGS is the percentage of sales that represents cost of goods sold. So $58,400 × 0.65 = $37,960. Therefore, the estimated cost of the woods is $37,960.