A company had the following purchases and sales during its first month of operations: $\begin{array}{|l|l|}
\hline \text { January 1 } & \text { Purchased } 10 \text { units at } \$ 4.00 \text { per unit } \
\hline \text { January } 9 & \text { Sold } 6 \text { units at } \$ 12.00 \text { per unit } \
\hline \text { January 17 } & \text { Purchased } 8 \text { units at } \$ 5.50 \text { per unit } \
\hline \text { January 27 } & \text { Sold } 7 \text { units at } \$ 12.00 \text { per unit } \
\hline
\end{array}$ Using the Perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.)
A)$23.35.
B)$24.00.
C)$40.00.
D)$59.00.
E)$25.00.

Question

Quizplus · Accepted Answer

The weighted average cost per unit is calculated after each purchase. After the first purchase, the cost is $4.00. After the second purchase, the average cost is $(10 \times 4 + 8 \times 5.5) / 18 = 4.67$. The cost of goods sold for the first sale is $6 \times 4.00 = 24.00$. For the second sale, it is $7 \times 4.67 = 32.67$. Total cost of goods sold is $24.00 + 32.67 = 56.67$, rounded to $59.00.

A Company Had the Following Purchases and Sales During Its