Question

Wattan Company reports beginning inventory of 20 units at $44 each. Every week for four weeks it purchases an additional 20 units at respective costs of $45, $46, $49, and $54 per unit for weeks 1 through 4. Compute the cost of goods available for sale and the units available for sale for this four-week period. Assume that no sales occur during those four weeks.

Answer 1

Answer:

The cost of goods available for sale is $4,760

Explanation:

Goods available for sales include all those goods which is available on the beginning of the period and all the purchases / production during the period.

Beginning Inventory = 20 x $44 = $880

Purchases for the month = ( 20 x 45 ) + ( 20 x 46 ) + ( 20 x 49 ) + ( 20 x 54 )

Purchases for the month = $900 + $920 + $980 + $1,080

Purchases for the month = $3,880

Cost of Goods available for sale = Beginning Inventory + Purchase for the month = $880 + $3,880 = $4,760