Question

Panamerican Foods uses a periodic inventory system to account for inventory. Panamerican has a beginning inventory of 1,050 boxes of salami at $13 each on January 1. Panamerican purchases 1,300 boxes at $12 each in February and 600 boxes at $14 each in March. There were no additional purchases or sales during the remainder of the year. Panamerican sells 550 boxes during the quarter. If Panamerican uses the weighted-average method, what is its cost of goods sold for the quarter? (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Multiple Choice None of the other answers are correct. $7,150 $7,700 $7,019 $6,600

Answer 1

Date	Units	Unit Cost	Total Cost
Jan-01	1,050	13	13,650
Feb	1,300	12	15,600
March	600	14	8,400
Total	2,950		37,650

Weighted average cost per unit = Total cost/ Total units

= 37,650/2,950

= $12.7627119

Number of units sold = 550

Cost of goods sold = Number of units sold x Weighted average cost per unit

= 550 x 12.7627119

= $7,019

Third option is correct.

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