During August, BP Company sold 850 units of Product G. The beginning inventory a

Question

During August, BP Company sold 850 units of Product G. The beginning inventory and purchases during the month are below.

Assignment Template attached below.

The following sales were made during August.

Required: Using the perpetual inventory system, compute the following amounts. Place your answers in the template provided below.

1. Compute the cost of goods sold using the moving average method, round both total dollars and dollars per unit to the nearest cent.

2. Compute the ending inventory using the moving average method, round both total dollars and dollars per unit to the nearest cent.

3. For each method, what numbers do you get when you add the cost of goods sold and ending inventory together for both units and dollars?

Please show work - if you can.

August 1 Beginning Inventory Balance 150 units @ $2.00 August 5 Purchase 300 units @ $2.50 August 10 Purchase 200 units @ $2.75 August 25 Purchase 250 units @ $2.80 August 30 Purchase 100 units @ $2.80

Explanation / Answer

1. Cost of goods sold: $2160.20

2. Ending inventory: $419.80

3. Cost of goods sold + Ending inventory = Beginning inventory + Purchases

Units: 850 + 150 = 150 + 850 = 1000

Dollars: $2160.20 + $419.80 = $300 + $2280 = $2580

Workings:

Note: Since the template has not been provided with the question, please ensure all numbers are correctly entered in the template prior to submission.

Moving Average Purchases Sold Ending Inventory Date No. of Units Unit Cost $ Total Cost $ No. of Units Unit
Price $ Total Issued $ No. of Units Unit Cost $ Total Cost $ Aug-01 150 2.00 300 Aug-04 130 2.00 260 20 2.00 40 Aug-05 300 2.50 750 320 2.47 790 Aug-06 300 2.47 741 20 2.47 49 Aug-10 200 2.75 550 220 2.72 599 Aug-13 180 2.72 489.60 40 2.72 109.40 Aug-25 250 2.80 700 290 2.79 809.40 Aug-28 240 2.79 669.60 50 2.79 139.80 Aug-30 100 2.80 280 150 2.8 419.80 Total 850 2280 850 2160.20 150 419.80

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