Question

Mountain Made started the month with 3 quilts in its beginning inventory that cost $200 each. During the month, Mountain Made purchased 7 additional quilts for $210 each. At the end of the month, Mountain Made counted its inventory and found that 2 quilts remained unsold. If Mountain Made uses periodic weighted average cost, its Cost of Goods Sold for the month is:

Answer 1

Answer:

Cost of Goods Sold for the month is $1656

Explanation:

Weighted Average Cost System calculates a new average for goods after each purchase.

Mountain Made Inventory Balance runs as follows:

At Beginning:

(3 quilts × $200) = $600

After Purchased of 7 additional quilts for $210 each:

(3 quilts × $200) + (7 quilts × $210) = $2070

New Inventory Cost = $2070/10quilts =$207 each

At end

2 quilts remained unsold. Therefore sold quilts were 8 ie (10quilts-2quilts)

Therefore cost of sold quilts is 8 × $207 = $1656