Warner Company purchased two units of a product for $36 and later purchased one more for $40.If the company uses the weighted average cost flow method,and it sold one unit of the product for $60,its gross margin would be $22.00.

Question

Quizplus · Accepted Answer

Average cost per unit = Cost of goods available for sale of [(2 × $36)+ (1 × $40)] ÷ Units available for sale of 3 = $37.33 per unit
Selling price of $60 - Cost of goods sold of $37.33 = $22.66

Warner Company Purchased Two Units of a Product for $36