Question

A company purchased 130 units for $30 each on January 31. It purchased 190 units for $35 each on February 28. It sold 190 units for $70 each from March 1 through December 31. If the company uses the weighted - average inventory costing method, caloulate the amount of Cost of Goods Sold on the income statement for the year ending December 31. (Assume the company uses the perpetual inventory system. Round any intermediate calculations two decimal places, and your final answer to the nearest dollar). A. $3,900 OB. 56,264 OG $10,550 OD. 56,650

Answer 1

Ans.	Option B $6,264

Weighted Average : Cost of goods sold Cost per unit # of units sold Cost of goods sold Date 31-Jan 28-Feb Goods Purchased # of Units Cost per unit 130 $30.00 190 $35.00 # of Units 130 130 190 320 130 Inventory Balance Cost per unit Inventory Balance $30.00 $3,900 $30.00 $3,900 $35.00 $6,650 $32.97 $10,550 $32.97 $4,286 Average March to December 190 $32.97 $6,264 Total Cost of goods sold $6,264 Ending inventory $4,286

*Weighted average rate is calculated by using the formula of (Total available balance / Total units available).