Panamerican Foods uses a periodic inventory system to account for inventory. Panamerican has a beginning inventory of 1,050 boxes of salami at $13 each on January 1. Panamerican purchases 1,300 boxes at $12 each in February and 600 boxes at $14 each in March. There were no additional purchases or sales during the remainder of the year. Panamerican sells 550 boxes during the quarter. If Panamerican uses the weighted-average method, what is its cost of goods sold for the quarter? (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Multiple Choice None of the other answers are correct. $7,150 $7,700 $7,019 $6,600
Date | Units | Unit Cost | Total Cost |
Jan-01 | 1,050 | 13 | 13,650 |
Feb | 1,300 | 12 | 15,600 |
March | 600 | 14 | 8,400 |
Total | 2,950 | 37,650 |
Weighted average cost per unit = Total cost/ Total units
= 37,650/2,950
= $12.7627119
Number of units sold = 550
Cost of goods sold = Number of units sold x Weighted average cost per unit
= 550 x 12.7627119
= $7,019
Third option is correct.
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