During July, Neptune Company Had Actual Sales of $144,000 Compared

Multiple Choice

During July, Neptune Company had actual sales of $144,000 compared to budgeted sales of $156,000. Actual cost of goods sold was $108,000, compared to a budget of $109,200. Monthly operating expenses, budgeted at $22,400, totaled $20,000. Interest revenue of $2,000 was earned during July but had not been included in the budget. In reviewing the decrease in COGS, the manager concludes:

A) the decrease in COGS was due to a one-time special purchase made at a discount.
B) the company is using LIFO inventory and prices are rising.
C) there is a scarcity of products available to be purchased.
D) all of the above.