Ace Systems, Inc. uses a perpetual inventory system. The company’s beginning inventory of a particular product and its purchases during the month of January were as follows:
$\begin{array}{lcccc}
& \text { Quantity } &\text { Unit Cost } & \text { Total Cost } \
\text { Beginning inventory (1 Jan.) } & 10&\$ 27.50 & \$ 275 \
\text { Purchase (15 Jan.) } & 15 & \$ 28.00 & \$ 420 \
\text { Purchase (23 Jan.) } & \underline{5} & \$ 29.00 & \$ 145 \
\quad \text { Total } & \underline{30}&& \underline{\$ 840}
\end{array}$
On 28 January, Ace Systems sells 18 units (10 units from beginning inventory, 4 units from 15 Jan purchase, and 4 units from 23 Jan purchase) of this product. The other 12 units remain in inventory at 31 January.

-Assuming that Ace Systems uses the weighted average cost flow assumption, the cost of goods sold to be recorded at 28 January is:

Question

Ace Systems, Inc. uses a perpetual inventory system. The company’s beginning inventory of a particular product and its purchases during the month of January were as follows:
$\begin{array}{lcccc} 
& \text { Quantity } &\text { Unit Cost } & \text { Total Cost } \
\text { Beginning inventory (1 Jan.) } & 10&\$ 27.50 & \$ 275 \
\text { Purchase (15 Jan.) } & 15 & \$ 28.00 & \$ 420 \
\text { Purchase (23 Jan.) } & \underline{5} & \$ 29.00 & \$ 145 \
\quad \text { Total } & \underline{30}&& \underline{\$ 840}
\end{array}$
On 28 January, Ace Systems sells 18 units (10 units from beginning inventory, 4 units from 15 Jan purchase, and 4 units from 23 Jan purchase) of this product. The other 12 units remain in inventory at 31 January.

-Assuming that Ace Systems uses the weighted average cost flow assumption, the cost of goods sold to be recorded at 28 January is:

Quizplus · Accepted Answer

The weighted average cost per unit is calculated as total cost divided by total quantity: $840/30 = $28. The cost of goods sold for 18 units is 18 * $28 = $504.

Ace Systems, Inc On 28 January, Ace Systems Sells 18 Units (10 Units