Pepper Corporation owns 75 percent of Salt Company's voting shares. During 20X8, Pepper produced 50,000 chairs at a cost of $79 each and sold 35,000 chairs to Salt for $90 each. Salt sold 18,000 of the chairs to unaffiliated companies for $117 each prior to December 31, 20X8, and sold the remainder in early 20X9 to unaffiliated companies for $130 each. Both companies use perpetual inventory systems. Based on the information given above, what amount of cost of goods sold did Pepper record in 20X8?

A. $2,765,000

B. $1,620,000

C. $2,963,000

D. $1,422,000

A. $2,765,000

Explanation:

Data provided

Number of chairs sold = 35,000

Cost per chair = $79

The computation of cost of goods sold of Pepper is shown below:-

Cost of goods sold = Number of chairs sold × Cost per chair

= 35,000 × $79

= $2,765,000

Therefore for computing the amount of cost of goods sold of pepper we simply multiply the number of chairs sold with cost per chair

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.