Shandy Shutters has the following inventory information. A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Cost of goods sold under the average-cost method is
A) €1,292.
B) €1,284.
C) €1,268.
D) €1,200.

Question

Shandy Shutters has the following inventory information.  A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Cost of goods sold under the average-cost method is
A) €1,292. 
B) €1,284. 
C) €1,268. 
D) €1,200.

Quizplus · Accepted Answer

Using the average-cost method, we need to calculate the weighted average cost per unit:

(50 units @ €12.50) + (25 units @ €13.00) + (30 units @ €13.50) = €1,262.50
€1,262.50 ÷ 105 units = €12.02 per unit (rounded to two decimal places)

Then, we can calculate the cost of goods sold:

100 units sold x €12.02 per unit = €1,202

Therefore, the correct answer is B, €1,284.

Shandy Shutters Has the Following Inventory Information