Warner Company purchased thirty-eight units of a product for $19 eachand later purchased nineteen more for $20.00. If the company uses the weighted average cost flow method, and it sold one unit of the product for $30, its gross margin would be $10.67.

Question

Quizplus · Accepted Answer

The weighted average cost is $19.53 ($19 x 38 + $20 x 19) / (38 + 19) = $19.53. The cost of goods sold is $19.53 x 1 = $19.53. The gross margin is $30 - $19.53 = $10.47.

Warner Company Purchased Thirty-Eight Units of a Product for $19