Tomas Company uses the perpetual inventory system and the moving-average method to value inventories. On August 1 there were 10000 units valued at $30000 in the beginning inventory. On August 10 20000 units were purchased for $4.95 per unit. On August 15 25000 units were sold for $12 per unit. The amount charged to cost of goods sold on August 15 was
A) $30000.
B) $99375.
C) $107500.
D) $118800.

Question

Quizplus · Accepted Answer

The moving-average cost is calculated as follows:Beginning inventory: 10,000 units at $3.00 = $30,000Purchase on August 10: 20,000 units at $4.95 = $99,000Total cost of goods available for sale: $129,000Weighted-average cost per unit: $129,000 / 30,000 units = $4.30Cost of goods sold: 25,000 units at $4.30 = $107,500

Tomas Company Uses the Perpetual Inventory System and the Moving-Average