Answer:
$410,000
Explanation:
Given:
Sales = $800,000
Gross profit = $340,000
Cost of goods sold = Sales - Gross profit
= 800,000 - 340,000
= $460,000
Now, Cost of goods sold = Purchases + operating expenses
Purchases = Purchase cost + freight charges - purchase returns - purchase discount
Substituting the above formula in cost of goods sold equation we get,
Cost of goods sold = (Purchase cost + freight charges - purchase returns - purchase discount) + operating expenses
460,000 = (Purchase cost + 20,000 - 80,000 - 40,000) + 150,000
460,000 = Purchase cost + 50,000
Purchase cost = $410,000
Total purchase cost is $410,000.
