Question

Sunland uses the periodic inventory system. For the current month, the beginning inventory consisted of 7200 units that cost $14.00 each. During the month, the company made two purchases: 2900 units at $15.00 each and 11900 units at $15.50 each. Sunland also sold 12700 units during the month. Using the average cost method, what is the amount of cost of goods sold for the month?

Answer 1

Solution:
Average Cost Method
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	ENDING INVENTORY
Date	Particulars	No. of Units	Cost Per unit	Total	No. of Units	Cost Per unit	Cost of Goods Sold	No. of Units	Cost Per unit	Ending invetory
------------	Beginning inventory	7200	$             14.00	$1,00,800
Purchases:
Purchases -1	Purchases	2900	$             15.00	$43,500
Purchases -2	Purchases	11900	$             15.50	$1,84,450
	Total Goods Available/ Cost of Goods Sold	22,000	$14.94	$3,28,750	12,700	$14.94	$1,89,778	9,300	$14.94	$1,38,972
Answer = Cost of Goods Sold for the month = $ 189,778