Cafe X bought 20,000 cups for $1,400 when they opened for business last month. At the end of the month they had 7,000 cups left. How much did the cups add to cost of goods sold (COGS) for the month?
Question
Cafe X bought 20,000 cups for $1,400 when they opened for business last month. At the end of the month they had 7,000 cups left. How much did the cups add to cost of goods sold (COGS) for the month?
Solution
Step 1: Determine the cost per cup. This is done by dividing the total cost of the cups by the total number of cups. In this case, 0.07 per cup.
Step 2: Determine the number of cups sold. This is done by subtracting the number of cups left at the end of the month from the initial number of cups. In this case, 20,000 cups - 7,000 cups = 13,000 cups sold.
Step 3: Calculate the cost of goods sold (COGS). This is done by multiplying the number of cups sold by the cost per cup. In this case, 13,000 cups * 910.
So, the cups added $910 to the cost of goods sold (COGS) for the month.
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