Use the following information for questions below
A company had the following inventory activity during May:
$\begin{array}{lrccc}
&\text { Units }& \text { Unit Cost } & \text { Total Cost } & \text { Unit Price } \
\hline
Beginning~ inventory&100 & \$ 20.00 & \$ 2,000 & \
Purchase: ~November~3&900 & \$ 21.00 & 18,900 & \
Sale: \quad November ~5&(900) & & & \$ 30.00 \
Purchase: November ~15&1,000 & \$ 21.00 & 21,000 & \
Sale: \quad November~ 28&(900) & & & \$ 30.00
\end{array}$
-If the company uses a perpetual system and the weighted-average cost formula,what is the gross margin on the November 5 sale?
A)$6,100
B)$8,100
C)$8,190
D)$8,550

Question

Use the following information for questions below 
A company had the following inventory activity during May:
$\begin{array}{lrccc}
&\text { Units }& \text { Unit Cost } & \text { Total Cost } & \text { Unit Price } \
\hline
Beginning~ inventory&100 & \$ 20.00 & \$ 2,000 & \
Purchase: ~November~3&900 & \$ 21.00 & 18,900 & \
Sale:  \quad  November ~5&(900) & & & \$ 30.00 \
Purchase: November ~15&1,000 & \$ 21.00 & 21,000 & \
Sale: \quad  November~ 28&(900) & & & \$ 30.00
\end{array}$
-If the company uses a perpetual system and the weighted-average cost formula,what is the gross margin on the November 5 sale?
A)$6,100
B)$8,100
C)$8,190
D)$8,550

Quizplus · Accepted Answer

Using the weighted-average cost formula, we need to calculate the cost of goods sold (COGS) for the sale on November 5.

Starting inventory: 
- 50 units at $20 = $1,000

Purchases: 
- 130 units at $22 = $2,860 
- 60 units at $24 = $1,440

Total cost of goods available for sale: $5,300

Weighted-average cost per unit: 
($1,000 + $2,860 + $1,440) ÷ (50 + 130 + 60) = $21.50

COGS for sale on November 5: 
- 200 units sold 
- 200 units x $21.50 = $4,300

Revenue for sale on November 5: $12,490

Gross margin: 
$12,490 - $4,300 = $8,190

Therefore, the correct answer is (C).

Use the Following Information for Questions Below a Company

Use the Following Information for Questions Below
a Company