Average-Cost Method: Periodic Inventory System Assume the following data with re

Question

Average-Cost Method: Periodic Inventory System

Assume the following data with regard to inventory for Vegan Company:

Calculate the cost of ending inventory and cost of goods sold according to the average-cost method under the periodic inventory system. In your calculations round average unit cost to the nearest cent and round your final answers to the nearest dollar.

Aug. 1 Inventory 40 units @ $10 per unit $ 400 8 Purchase 50 units @ $11 per unit 550 22 Purchase 35 units @ $12 per unit 420 Goods available for sale 125 units $1,370 Aug. 15 Sale 45 units 28 Sale 25 units Inventory, Aug. 31 55 units

Explanation / Answer

Units Amount Cost of goods available for sale 125 1370 Average cost per unit 10.96 (1370/125) Ending inventory 55 Average cost per unit 10.96 Total inventory cost 603 Cost of goods sold Number of units sold 70 Average cost per unit 10.96 Total cost of goods sold 767

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