When using the moving-average cost formula with a perpetual system,
A) a weighted-average cost is calculated at year end.
B) a new unit cost is calculated each time a sale is made.
C) a new unit cost is calculated each time a purchase is made.
D) a new unit cost is calculated both when a sale is made and when a purchase is made.

Question

Quizplus · Accepted Answer

A new unit cost is calculated each time a purchase is made in a moving-average cost formula with a perpetual system, reflecting the cost of the most recent purchase.

When Using the Moving-Average Cost Formula with a Perpetual System