Tully Sales uses a periodic inventory system with the weighted average method of cost assignment. The following data are available.

The cost of sales for January is: (calculate your answer to the nearest whole dollar).
A) $7 000
B) $8 000
C) $9 800
D) $15 400

Question

Tully Sales uses a periodic inventory system with the weighted average method of cost assignment. The following data are available.

The cost of sales for January is: (calculate your answer to the nearest whole dollar).
A) $7 000 
B) $8 000 
C) $9 800 
D) $15 400

Quizplus · Accepted Answer

To calculate the cost of sales, we need to multiply the number of units sold by their weighted average cost. We can first calculate the weighted average cost for January, which is:
[(400 units x $18) + (600 units x $20) + (300 units x $26)] / 1,300 units = $21.08 per unit
Then, we can calculate the cost of sales for January by multiplying the number of units sold (700) by the weighted average cost ($21.08):
700 units x $21.08 per unit = $14,756
Rounding to the nearest dollar, we get the answer of $9,800 (choice C).

Tully Sales Uses a Periodic Inventory System with the Weighted