6. Mama\'s Mexican Meals, Inc., had the following activity for an inventory item
ID: 2341295 • Letter: 6
Question
6. Mama's Mexican Meals, Inc., had the following activity for an inventory item during June:
Units
Unit
Cost
Beginning inventory
50
$10
Purchase (June 5).
10
16
Purchase (June 15)
30
14
Sale (June 20).
40
Sale (June 25).
20
Purchase (June 30)
10
20
Assuming Mama's uses a perpetual average cost flow assumption, ending inventory for June would be
a.
$512
b.
$560
c.
$768
d.
$720
Units
Unit
Cost
Beginning inventory
50
$10
Purchase (June 5).
10
16
Purchase (June 15)
30
14
Sale (June 20).
40
Sale (June 25).
20
Purchase (June 30)
10
20
Explanation / Answer
Solution:
Hence option b is correct.
Computation of ending inventory COGS under Weighted Average Cost Date Opening Stock Purchases Cost of Goods Sold Closing Stock Qty Rate Amount Qty Rate Amount Qty Rate Amount Qty Rate Amount 1-Jun 50 $10.00 $500.00 0 $0.00 $0.00 0 $0.00 $0.00 50 $10.00 $500.00 5-Jun 50 $10.00 $500.00 10 $16.00 $160.00 0 $0.00 $0.00 60 $11.00 $660 15-Jun 60 $11.00 $660 30 $14.00 $420 0 $0.00 $0.00 90 $12.00 $1,080 20-Jun 90 $12.00 $1,080 0 $0.00 $0.00 40 $12.00 $480 50 $12.00 $600 25-Jun 50 $12.00 $600 0 $0.00 $0.00 20 $12.00 $240.00 30 $12.00 $360 30-Jun 30 $12.00 $360 10 $20.00 $200.00 0 $0.00 $0.00 40 $14.00 $560 Total 60 $720 40 $560Related Questions
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