Question

A company has a beginning inventory of $ 20 comma 000 and purchases during the year of $ 130 comma 000. The beginning inventory consisted of 3 comma 000 units and 6 comma 000 units were purchased during the year. The company has 5000 units left at yearminusend. Under averageminus​cost, what is Cost of Goods​ Sold? (Round any intermediary calculations to two decimal places and your final answer to the nearest​ dollar.)

Answer 1

Answer:

$66,680

Explanation:

The computation of the cost pf goods sold is shown below:

= Number of units sold × average cost per unit

where,

Number of units sold equals to

= Beginning inventory units  + purchased units - ending inventory units units

= 3,000 units + 6,000 units - 5,000 units

= 4,000 units

Now the average cost per unit would be

= (Beginning inventory + purchases) ÷ (Beginning inventory units + purchased units)

= ($20,000 + $130,000) ÷ (3,000 units + 6,000 units)

= $16.67

Now put these values to the above formula  

So, the value would equal to

= $4,000 units × $16.67

= $66,680