Tomas Company uses the perpetual inventory system and the moving-average method to cost inventories. On August 1, there were 10,000 units reported at $30,000 in the beginning inventory. On August 10, 20,000 units were purchased for $4.95 per unit. On August 15, 25,000 units were sold for $12 per unit. The amount charged to cost of goods sold on August 15 was

Question

Quizplus · Accepted Answer

To calculate the cost per unit using the moving-average method, we must divide the total cost of goods available for sale by the total number of units available for sale.

Cost of goods available for sale = beginning inventory + purchases
= 10,000 × $30,000 + 20,000 × $4.95
= $300,000 + $99,000
= $399,000

Number of units available for sale = beginning inventory + purchases
= 10,000 + 20,000
= 30,000

Cost per unit = $399,000 ÷ 30,000
= $13.30 (rounded to two decimal places)

The cost of goods sold is calculated by multiplying the number of units sold by the cost per unit.

Number of units sold = 25,000

Cost of goods sold = 25,000 × $13.30
= $332,500

Therefore, the amount charged to cost of goods sold on August 15 was $107,500 (=$332,500-($4.95X5,000)).

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