Question

A company has a beginning inventory of

$30,000

and purchases during the year of

$110,000.

The beginning inventory consisted of

2,000

units and

7,000

units were purchased during the year. The company has

5,000

units left at

year−end.

Under

average−​cost,

what is Cost of Goods​ Sold? (Round any intermediary calculations to two decimal places and your final answer to the nearest​ dollar.)

Answer 1

Computation of cost of goods sold using Average cost Methods:

Average cost = Total cost / Number of units

= $140000 / 9000 = $15.56

Number of units sold = 2000 units + 7000 units - 5000 units

= 4000 units

Cost of goods sold = 4000 units @$15.56 = $62240