A corporation has provided the following information about one of their products:

$$\begin{array}{ll}
\begin{array} { ll }
\text { Date } & \text { Transaction } \
1 / 1 & \text { Beginning Inventory } \
6 / 5 & \text { Purchase } \
11 / 10 & \text { Purchase } \

\end{array}
\begin{array} { l l}
\text { Number of Units } & \text { Cost per Unit } \
200& \$ 140 \
400 & \$ 160 \
100 & \$ 200 \

\end{array}
\end{array}$$
During the year,400 units were sold. What is cost of goods sold using the average cost method?
A)$48,000
B)$64,000
C)$50,000
D)$62,000

Question

A corporation has provided the following information about one of their products:

$$\begin{array}{ll}
\begin{array} { ll } 
\text { Date } & \text { Transaction } \
1 / 1 & \text { Beginning Inventory } \
6 / 5 & \text { Purchase } \
11 / 10 & \text { Purchase } \

\end{array}
\begin{array} { l l} 
\text { Number of Units } & \text { Cost per Unit } \
200& \$ 140 \
400 & \$ 160 \
100 & \$ 200 \

\end{array}
\end{array}$$
 During the year,400 units were sold. What is cost of goods sold using the average cost method?
A)$48,000
B)$64,000
C)$50,000
D)$62,000

Quizplus · Accepted Answer

The average cost per unit is calculated by dividing the total cost of all units by the total number of units: $(200 \times 140 + 400 \times 160 + 100 \times 200) / (200 + 400 + 100) = 156$. The cost of goods sold for 400 units is $400 \times 156 = 62,400$. However, since this is not an option, the closest option is $64,000.

A Corporation Has Provided the Following Information About One of Their