Question

A company had the following purchases and sales during its first month of operations: January 1 Purchased 10 units at $4.00 per unit January 9 Sold 6 units at $12.00 per unit January 17 Purchased 8 units at $5.50 per unit January 27 Sold 7 units at $12.00 per unit Using the Perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.) $40.00. $59.00. $25.00. $24.00. $23.35.

Answer 1

Answer:

$59.00.

Explanation:

Because it is perpetual method we will check the inventory available at the moment of each sale.

First sale:

Inventory Available Jan 1st 10 units at $4

sales 6 units COGS $4 = 24

Second Sale:

Inventory Available Jan 1st   4 units at $4         $16

                               Jan 17th  8 units at  $5.5     $44

Total 12 untis at $60 = 60/12 = $5 per unit

sales 7 units COGS $5 = 35

Total COGS 35 + 24 = 59