Question

Given the following​ data, calculate the cost of goods sold using the

average−cost

method. Round average cost per unit calculations to two decimal places. Round final answer to the nearest dollar.

Date	Item	Unit
​1/1	Beginning inventory	70 units at $20 per unit
​5/10	Purchase of inventory	10 units at $20 per unit
​10/9	Purchase of inventory	10 units at $ 32 per unit
​12/31	Ending inventory	38 units

Answer 1

Cost of goods sold = $1,109

Average cost method
Date	Decription	Quantity	Cost per unit	Total cost		Calculation
1-Jan	Beginning Inventory	70	$            20.00	$     1,400
10-May	Purchase	10	$            20.00	$         200
9-Oct	Purchase	10	$            32.00	$         320
31-Dec	Goods Available For Sale	90	$            21.33	$     1,920		=$1,920/90 units =21.33 per unit
31-Dec	Ending Inventory	38	$            21.33	$         811		=38 units * $21,.33
31-Dec	Cost of goods sold	52		$     1,109		=$1,920-$811 = $1,109