Consider the following facts: - Company A has the following inventory informatio

Question

Consider the following facts: - Company A has the following inventory information: - Inventory at the beginning of January was 15 units purchased at $8.00 each. - On January 8, purchased 60 units @ $8.30 each - On January 17, purchased 30 units @ $8.40 each - On January 25, purchased 45 units @ $8.80 each - On January 31, a physical count showed 45 units on hand - Company A uses the periodic inventory system Company A's cost of goods sold under the average-cost method is: $897 None of these answers are correct $886 $889 $870

Explanation / Answer

Average cost =Total cost of inventory available for sale /Total units

                 = [(15 *8) +(60*8.30) +(30*8.40) +(45 *8.8)] /[ 15 +60+30+45]

                = [ 120+ 498+ 252+ 396 ] /150

               = 1266/ 150.

             = $ 8.44 per unit

Units sold =Total units -ending inventory

             = 150 - 45 = 105

COGS = 105*8.44

        = $ 886.2

Correct option is "C" - 886

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.