When the average cost formula is applied in a periodic inventory system, the sale of goods during the year will change the unit cost used for calculating ending inventory.

Question

Quizplus · Accepted Answer

In a periodic inventory system, the average cost formula calculates the unit cost based on the total cost of goods available for sale and the total units available at the end of the period, not affected by sales during the year.

When the Average Cost Formula Is Applied in a Periodic