Question

Oriole Company reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 390 $6 $2,340 12 Purchase 780 7 5,460 23 Purchase 585 8 4,680 30 Inventory 195 Assume a sale of 858 units occurred on June 15 for a selling price of $9 and a sale of 702 units on June 27 for $10. Calculate cost of goods available for sale. The cost of goods available for sal

Answer 1

Answer:

Cost of goods available for sale = $12,480

Explanation:

The cost of goods available for sale is the sum of the value of the opening inventory plus the cost of new purchase. The cost of new purchase would include carriage inward cost if any.

For Oriole company , the cost of goods available for sale would be computed as follows:

                                                                           $

Opening inventory                                            2,340

Purchases

June 12                5,460

June 23               4,680                                 10,140

Cost of goods available for sale                     12,480

Note that the sales made are not relevant for the purpose of determining the cost of goods available for sale. Also, the closing inventory would have been deducted from the cost of goods available for sale to arrive at the cost of goods sold should the question require it.