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20RQ

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Horngren'S Financial And Managerial Accounting
Found in: Page 885

Short Answer

How does a merchandising company calculate unit cost per item?

The merchandising company calculates the unit cost per item by calculating the total number of items sold from the total cost of goods sold.

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Step by Step Solution

Step 1: Definition of merchandising company

A merchandising company is a company that sells the goods which are purchased from the suppliers.

Step 2: Computation of cost per item

The cost per item for merchandising company is computed by using the formula in which the total cost of goods sold is divided by the total number of items sold.

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