Quan uses a periodic inventory system.At the end of April, Quan had 20 units on hand. If Quan, Inc.uses the weighted average cost inventory method, how much is cost of goods sold for April?

Question

Quan uses a periodic inventory system.At the end of April, Quan had 20 units on hand.  If Quan, Inc.uses the weighted average cost inventory method, how much is cost of goods sold for April?

Quizplus · Accepted Answer

To calculate the cost of goods sold using the weighted average cost method, the total cost of all units available for sale (beginning inventory plus purchases) is divided by the total number of units available for sale. This gives the weighted average cost per unit. Then, the cost of goods sold is calculated by multiplying the number of units sold by the weighted average cost per unit.

In this case, we need to know the total cost of all units available for sale in April. There is no information given about purchases, so we can assume that all units sold in April were from the beginning inventory (20 units). We also need to know the weighted average cost per unit.

To calculate the weighted average cost per unit, we need to know the total cost of beginning inventory plus purchases. Since there is no information given about purchases, we can assume that the beginning inventory is the only inventory available for sale. The cost of the beginning inventory is not given, so we cannot calculate the weighted average cost per unit.

However, we can eliminate choices A, C, and D because they are all based on a calculation that requires knowing the weighted average cost per unit. Choice B is the only answer that does not require this information and is based solely on the beginning inventory. The cost of goods sold for April would be $232.

Quan Uses a Periodic Inventory System