Question

The Xu Corporation uses a periodic inventory system. The company has a beginning inventory of 1,950 units at $22 each on January 1. Xu purchases 2,200 units at $21 each in February and 1,050 units at $23 each in March. There were no additional purchases or sales during the remainder of the year. Xu sells 1,000 units during the quarter. If Xu uses the weighted average method, what is its cost of goods sold for the quarter? (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.)

Answer 1

Answer:

$21,770

Explanation:

The computation of cost of goods sold is shown below:-

= (1,950 × $22) + (2,200 × $21) + (1,050 × $23)

= $42,900 + $46,200 + $24,150

= $113,250

Total number of units for sale = 1,950 + 2,200 + 1,050

= $5,200

Weighted average cost per unit = Cost of units available for sale ÷ Number of units available for sale

= $113,250 ÷ $5,200

= $21.77

Cost of goods sold = Sold units × Weighted average cost per unit

= 1,000 × $21.77

= $21,770