Question

Cornerstone Exercise 6-24 (Algorithmic) Inventory Costing: Average Cost Filimonov Inc. has the following information related to purchases and sales of one of its inventory items: Date Description Units Purchased at Cost Units Sold at Retail June 1 Beginning Inventory 9 Purchase 1 150 units $10 - $1,500 200 units @ $12 = $2,400 14 Sale 1 300 units @ $25 22 Purchase 2 250 units $14 = $3,500 29 Sale 2 212 units @ $25 Assume that Filimonov uses a perpetual inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the average cost method. (Note: Round per-unit calculations and final answers to two decimal places.) Cost of goods sold 620,980 x Cost of ending inventory $ 118,976 x Feedback Check My Work For cost of goods sold and cost of ending inventory using the average cost method, apply the following steps: Step 1: Calculate the cost of goods available for sale immediately prior to the sale transaction. Step 2: Apply the inventory costing method, recognizing that under average cost, the cost of goods available for sale is allocated between ending inventory and cost of goods sold, based on a weighted average cost of the goods available for sale (cost of goods available for sale units available for sale) Step 3: Repeat the first two steps for all inventory transactions during the period.

Answer 1

Solution:

Computation of ending inventory and COGS under Weighted Average Cost (Perpetual)
Date	Goods Purchased	Cost of Goods sold	Inventory Balance
Units	Cost per unit	Units	Cost per unit	COGS	Units	Cost per unit	Inventory Balance
1-june						150	$10.00	$1,500.00
9-june	200	$12.00				150	$10.00	$1,500.00
						200	$12.00	$2,400.00
Average Cost						350	$11.14	$3,900.00
14-june			300	$11.14	$3,342.00	50	$11.16	$558.00
22-june	250	$14.00				50	$11.16	$558.00
						250	$14.00	$3,500.00
Average Cost						300	$13.53	$4,058.00
29-june			212	$13.53	$2,868.36	88	$13.52	$1,189.64
Total			512		$6,210.36	88	$13.52	$1,189.64

Cost of goods sold = $6210.36

Cost of ending inventory= $1189.64