Samson Company had the following balances and transactions during 2013. What would the company's Cost of goods sold be on the December 31, 2013 income statement if the perpetual average-costing method is used? (Answers are rounded to the nearest dollar.)

Question

Samson Company had the following balances and transactions during 2013.  What would the company's Cost of goods sold be on the December 31, 2013 income statement if the perpetual average-costing method is used? (Answers are rounded to the nearest dollar.)

Quizplus · Accepted Answer

Using the perpetual average-costing method, we need to calculate the weighted average cost per unit first.

Total cost of goods available for sale = $5,460 + $2,880 = $8,340
Total units available for sale = 1,200 + 400 = 1,600
Weighted average cost per unit = $8,340 ÷ 1,600 = $5.21 per unit

Now, we can calculate the cost of goods sold:
Cost of goods sold = 300 units x $5.21 per unit = $1,563. This answer needs to be rounded to the nearest dollar, which gives $1,546.

Therefore, the correct answer is C) $1,746

Samson Company Had the Following Balances and Transactions During 2013