Mouton uses the moving average flow assumption.On July 1, there were 180 units on hand and the total inventory cost was $900.On July 10, 40 more units were purchased at a cost of $6 apiece.Sales included 20 units on July 3 and 60 units on July 17.What was the total cost of goods sold recorded for the units sold on July 17?
A)$728
B)$330
C)$100
D)$312

Question

Quizplus · Accepted Answer

Using the moving average method, the cost per unit is calculated as follows:

- On July 1, the cost per unit is $900/180 = $5. 
- On July 10, the cost per unit is (180*$5 + 40*$6)/220 = $5.18.

The cost of goods sold for the 20 units sold on July 3 is 20*$5.18 = $103.60.

On July 17, there are 180+40-20-60 = 140 units on hand. The cost of goods sold for the 60 units sold on July 17 is 60*$5.18 = $310.80.

Therefore, the total cost of goods sold recorded for the units sold on July 17 is $310.80. Answer D is correct.

Mouton Uses the Moving Average Flow Assumption