Vestle Company uses the periodic inventory system.For January 2011, the beginning inventory consisted of 12,000 units that cost CHF12 each.During the month, the company made two purchases: 5,000 units at CHF13 each and 20,000 units at CHF13.50 each.Vestle sold 21,500 units during the month for CHF19.50 per unit.Using the average-cost method, what is the amount of cost of goods sold for the month of January 2011 (round per unit amount to two decimal places)?

Question

Quizplus · Accepted Answer

The average cost per unit is (12,000 x CHF12 + 5,000 x CHF13 + 20,000 x CHF13.50) / (12,000 + 5,000 + 20,000) = CHF13.25. The cost of goods sold is 21,500 units x CHF13.25 = CHF283,875.

Vestle Company Uses the Periodic Inventory System