Exhibit 8-4 RK, Inc.had the following activity for an inventory item during June:
$\begin{array}{lll}&&\text { Unit }\&\text { Units }&\text { Cost }\
\text { Beginning inventory } & 50 & \$ 10 \
\text { Purchase (June 5) } & 10 & 16 \
\text { Purchase (June 15) } & 30 & 14 \
\text { Sale (June 20) } & 40 & \
\text { Sale (June 25) } & 20 &\
\text { Purchase (June 30) }&10& 20
\end{array}$
- Refer to Exhibit 8-4.Assuming RK uses a periodic weighted average cost flow assumption, cost of goods sold for June would be
A)$512
B)$560
C)$768
D)$720

Question

Quizplus · Accepted Answer

To calculate the cost of goods sold using the periodic weighted average method, first calculate the total cost and total units available for sale: (50 units x $10) + (10 units x $16) + (30 units x $14) + (10 units x $20) = $1,120 for 100 units. The average cost per unit is $1,120 / 100 = $11.20. The total units sold in June are 60 (40 + 20). Therefore, the cost of goods sold is 60 units x $11.20 = $672.

Exhibit 8-4 RK, Inc - Refer to Exhibit 8-4