Question

Multiple Choice Question 93 Sheridan Shutters has the following inventory information. Nov. 1 8 17 25 Inventory Purchase Purchase Purchase 40 units @ $4.00 80 units @ $5.00 50 units @ $5.00 110 units @ $6.00 A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Cost of goods sold (rounded to the nearest dollar) under the average-cost method is $945. $951. $967. O $913.

Answer 1

Sales = Total purchase + opening inventory - closing inventory

= 80+50+110+40 - 100

= 180 units

Average cost = Total cost / total units

Total cost = 40*4 + 80*5 + 50*5 + 110*6

= 160+400+250+660

= $ 1,470

Average cost = 1470/280 =$ 5.25 per unit

Cost of goods sold = sales*per unit cost

= 180*5.25

= $ 945

Therefore the correct option is 1st.

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