Question

Swifty uses the periodic inventory system. For the current month, the beginning inventory consisted of 7300 units that cost $11.00 each. During the month, the company made two purchases: 2800 units at $12.00 each and 12200 units at $12.50 each. Swifty also sold 13100 units during the month. Using the average cost method, what is the amount of cost of goods sold for the month? (Round average cost per unit to 2 decimal places, e.g. 1.48.)

1- $156545.
2- $157200.
3- $151400.
4- $163300.

Answer 1

1. $156545.

Step-by-step explanation:

Average cost of inventory = {(7300 x $11) + (2800 x $12) + ($12200 x $12.50)}/(7300 + 2800 + 12200)

Average cost of inventory = $80300 + $33600 + $152500)/22300

Average cost of inventory = $11.95 per unit

Cost of goods sold = Units sold * average cost per unit

Cost of goods sold = 13,100 * $11.95

Cost of goods sold = $156,545