Question

Cornerstone Exercise 6-32 (Algorithmic) Inventory Costing Methods: Periodic Average Cost (Appendix 6B) Bordeaux Company has the following information related to purchases and sales of one of its inventory items: Date Description Units Purchased at Cost Units Sold at Retail June 1 Beginning Inventory 150 units @ $15 = $2,250 9 Purchase 1 200 units @ $12 = $2,400 14 Sale 1 300 units @ $25 22 Purchase 2 250 units @ $14 = $3,500 29 Sale 2 225 units @ $25 Assume that Bordeaux uses a periodic inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the average cost method. (Note: Use four deci the nearest dollar.) Cost of goods sold $ 7,131.25 X Cost of ending inventory Feedback Check My Work For cost of goods sold and cost of ending inventory using the average cost method, apply the following steps: Step 1: Calculate the cost of goods available for sale for the period

Answer 1

Correct Answer:

	Weighted Average
Cost of Goods Sold	$                         7,131
Ending Inventory	$                         1,019

Working:

Cost of Goods Available for sale
		Units	Cost per unit	value
Beginning Inventory		150	$                         15.00	$                   2,250.00
Purchases
		200	$                         12.00	$                   2,400.00
		250	$                         14.00	$                   3,500.00
Total		600		$                   8,150.00

Weighted Average Cost Per unit
Units		(A)	600
Total Cost		(B)	$                   8,150.00
Average Cost		(C=B/A)	$                    13.5833

	Weighted Average
A	Total Units Available for sale			600		$                         8,150.00
	Units Sold			525
	Ending Inventory Units			75
	Valuation
	Cost of Goods Sold		300		$                         13.58	$                         4,074.99
			225		$                         13.58	$                         3,056.24
B	Cost of Goods Sold		525	units		$                         7,131.23
A-B	Ending Inventory		75	units		$                         1,018.77

End of answer.

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