Ace Systems, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows:
On January 28, Ace Systems sells 18 units of this product. The other 12 units remain in inventory at January 31.
-Refer to above data. Assuming that Ace Systems uses the average cost flow assumption, the cost of goods sold to be recorded at January 28 is:

Question

Ace Systems, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows:
  On January 28, Ace Systems sells 18 units of this product. The other 12 units remain in inventory at January 31.
-Refer to above data. Assuming that Ace Systems uses the average cost flow assumption, the cost of goods sold to be recorded at January 28 is:

Quizplus · Accepted Answer

The average cost flow assumption calculates the cost of goods sold by averaging the cost of all inventory items available for sale during the period. The specific calculation details are not provided, but based on the options, $504 is the correct average cost for the goods sold.