Question

Maxim Corp. has provided the following information about one of its products:Date Transaction Number of Units Cost per Unit1/1 Beginning Inventory 285 $ 157 6/5 Purchase 485 $ 177 11/10 Purchase 185 $ 217 During the year, Maxim sold 570 units.What is cost of goods sold using the average cost method? (Do not round intermediate computations.)

Answer 1

$101,904.6

Step-by-step explanation:

The computation of the cost of goods sold using the average cost method is shown below:

Beginnig Inventory 285 at $157 = $44,745

Purchases 485 at $177 = $85,845

Purchases 185 at $217 = $40,145

Total cost = $170,735

Now

Total number of units is

= 285 + 485 + 185

= 955

Now

Average Cost per unit is

= $170,735 ÷ 955

=$ 178.78

And, finally

Cost of goods Sold is

= 570 × $178.78

= $101,904.6