Question

The Brentwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company sold 20 blankets in the month of May. May 5, 10 units @ $30 each, May 12, 20 units @ $35 each, and May 30, 20 units @ $40 each. Assuming that the company uses the periodic inventory system, determine the Cost of Goods Sold for using the Weighted Average inventory cost method.

Answer 1

Cost of goods sold = $720

Working

Weighted Average method
Total Units Available for sale		50
Units Sold		20
Closing Stock in Units		30
Valuation
Ending Inventory	30	@	$             36.00	$              1,080
Value Of Ending Inventory				$              1,080
Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$                  720

.

	Units	Cost per unit	value
Beginning Balance	0	$                          -	$ 0
Purchases
	10	$                   30.00	$ 300
	20	$                   35.00	$ 700
	20	$                   40.00	$ 800
Cost of goods available for sale	50		$ 1,800

.

Average Cost of Inventory
Units	(A)	50
Total Cost	(B)	$ 1,800
Average Cost	(C=B/A)	$ 36.00