Question

The Xu Corporation uses a periodic inventory system. The company has a beginning inventory of 2,150 units at $24 each on January 1. Xu purchases 2,400 units at $23 each in February and 1,150 units at $25 each in March. There were no additional purchases or sales during the remainder of the year. Xu sells 1,100 units during the quarter. If Xu uses the weighted average method, what is its cost of goods sold for the quarter

Answer 1

Answer:

$26,159

Explanation:

Cost of goods available for sale = (2,150 units * $24) + (2,400 units * $23) + (1,150 units * $25)

Cost of goods available for sale = $51,600 + $55,200 + $28,750

Cost of goods available for sale = $135,550

Number of units available for sale = 2,150 units + 2,400 units + 1,150 units

Number of units available for sale = 5,700 units

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

Weighted average cost per unit = $135,550 / 5,700

Weighted average cost per unit = $23.7807

Xu sells 1,100 units during the quarter.

Cost of goods sold = 1,100 units * $23.7807 per unit

Cost of goods sold = $26,159