Use the following information for the month of June for questions 2-32. XYZ Inc.

Question

Use the following information for the month of June for questions 2-32. XYZ Inc. uses the average cos (Use unrounded numbers in your calculations but round to the nearest cent for presentation t formula in a perpetual inventory system. purposes in your answer.) un 1 Beginning inventory 20 units @ $19.00 per unit Jun 5 Purchase 100 units @ $22.00 per unit 70 units Jun 8 Sale Jun 9 Purchase Jun 10 Sale Jun 22 Sale 80 units @ 22.31 per unit 25 units 40 units 29. The cost of goods sold for the June 8 sale is (a) $1,480.00. (b) $1,505.00. (c) $1,527.68 (d) $1,540.00. 30. The cost of goods sold for the June 10 sale is (a) $545.60. (b) $549.96 (c) $550.00. (d) $557.75. 31. Total cost of goods sold for the month of June is (a) $2,914.65. (b) $2,934.90 (c) $2,946.24. (d) $2,994.80. 32. XYZ Inc. has an ending inventory on June 30 of (a) $1,370.00 (b) $1,418.56. (c) $1,429.90. (d) $1,450.15

Explanation / Answer

29 Ans is b $1505.00 Explanation: Units Rate Amount Average rate Jun 1 Beg. Inventory 20 19 380 Jun 5 Purchase 100 22 2200 Total Cost for Jun 8 sales 120 2580 $            21.50 Cost of goods sold 70 units x $21.5 = $1,505.00 30 Ans is b $549.96 Units Rate Amount Average rate Explanation Balance Average cost 50 21.5 1075 Jun 9 Purchase 80 22.31 1784.8 Total Cost for Jun 10 & 22 sales 130 2859.8           21.9985 Cost of goods sold 25 units x $21.9985 = $549.96 31 Ans is b$2,934.90 Explanation Cost of goods sold for June 22 = 40 units x 21.9985 = $879.94 Total cost of goods sold 8-Jun 1505 10-Jun 549.96 22-Jun 879.94 Total $          2,934.90 32 Ans is c $1429.90 Explanation: Units in ending inventory 65 x 21.9985 = $1,429.90

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