Question

Computing COGS using Weighted Average Method:

1-1-18 - Beginning Inventory of 8 Cameras at cost of $10 each
1-8-18 - Sold 3 Cameras
1-16-10 - Purchase 5 Cameras at cost of $12 each
1-20-18 - Sold 8 Cameras
1-30-18 - Purchase 7 Cameras at cost of $14 each
Ending Inventory = 9 cameras
Cameras Sold = 11 cameras
What is the total amount of $ for all sold cameras?

Answer 1

The total amount for all sold cameras using the Weighted Average Method is $130.90. This is calculated by determining the weighted average cost per camera ($11.90) and applying it to the quantity of cameras sold (11 cameras). The result reflects a more accurate cost of goods sold considering the varying costs in the inventory.

Step-by-step explanation:

To compute the cost of goods sold (COGS) using the Weighted Average Method, we need to calculate the weighted average cost per unit and then apply it to the quantity of cameras sold. Let's break down the transactions:

Beginning Inventory (1-1-18):8 cameras at $10 each.

Purchase (1-16-18):5 cameras at $12 each.

Purchase (1-30-18):7 cameras at $14 each.

To find the weighted average cost per camera, we calculate the total cost and divide it by the total quantity:

`\[ \text{Weighted Average Cost per Camera} = \frac{(8 \text{ cameras} * $10) + (5 \text{ cameras} * $12) + (7 \text{ cameras} * $14)}{8 + 5 + 7} \]`

`\[ \text{Weighted Average Cost per Camera} = ($80 + $60 + $98)/(20) = ($238)/(20) = $11.90 \]`

Now, we apply this weighted average cost to the number of cameras sold (11 cameras):

`\[ \text{COGS} = 11 \text{ cameras} * $11.90 \]`

`\[ \text{COGS} = $130.90 \]`

Therefore, the total amount for all sold cameras is $130.90. This calculation accounts for the varying costs of cameras in the inventory, providing a more accurate representation of the cost associated with the items sold.