Quidditch, Inc. is a merchandiser of a single line of broomsticks. At the beginning of...
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Accounting
Quidditch, Inc. is a merchandiser of a single line of broomsticks. At the beginning of the day, the shop had 15 brooms in its inventory. During the day, 5 new brooms were delivered to the shop. By close of business, only 9 brooms remained in inventory.
The purchase price of each broom from the supplier is $250. In addition, the company pays $5 for shipping on each broomstick and 2% of the purchase price for delivery insurance on each broomstick. These costs have remained consistent since the company began business.
Quidditch sells each broomstick for $475.
Which of the following statements is correct?
A.
The product cost per broomstick is $250.
B.
The gross profit per broomstick is $215.
C.
The ending inventory reported on the companys balance sheet is $2,860.
D.
The companys total gross profit for the day is $1,935.
E.
The shipping cost of $5 per broom would be reported as an operating expense on the income statement.
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