Netta Shutters has the following inventory information. A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand. Assume a periodic inventory system is used. Cost of goods sold (rounded to the nearest dollar) under the average-cost method is
A)$1,740.
B)$1,772.
C)$1,778.
D)$1,794.

Question

Netta Shutters has the following inventory information.  A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand. Assume a periodic inventory system is used. Cost of goods sold (rounded to the nearest dollar) under the average-cost method is
A)$1,740. 
B)$1,772. 
C)$1,778. 
D)$1,794.

Quizplus · Accepted Answer

To calculate cost of goods sold using the average-cost method, we need to determine the average cost per unit.

Total cost of goods available for sale = $8,980 
Total units available for sale = 150

Average cost per unit = Total cost of goods available for sale / Total units available for sale

Average cost per unit = $8,980 / 150 = $59.87

Therefore, cost of goods sold = Average cost per unit x Number of units sold

Cost of goods sold = $59.87 x (150 - 90) = $1,772.

Netta Shutters Has the Following Inventory Information