Question

In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 200 units at $7 on January 1, (2) 500 units at $8 on January 8, and (3) 800 units at $9 on January 29.

Assume 975 units are on hand at the end of the month, calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the weighted average cost flow assumptions. Assume a periodic inventory system is used.

(Round "Cost per Unit" to 2 decimal places.)

Weighted Average Cost Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold

Answer 1

	Units	Unit cost	Total
January 1	200	7	1400
January 8	500	8	4000
January 29	800	9	7200
Total	1500		12600
Average cost per unit	8.40	=12600/1500
Cost of goods available for sale	12600
Ending inventory	8190	=975*8.40
Cost of goods sold	4410	=(1500-975)*8.40