Use this inventory information for the month of March to answer the following question. Assuming that a perpetual inventory system is used, what is cost of goods sold (rounded) under the average-cost method?
A) $6,020
B) $3,210
C) $5,190
D) $2,810

Question

Use this inventory information for the month of March to answer the following question.  Assuming that a perpetual inventory system is used, what is cost of goods sold (rounded) under the average-cost method?
A) $6,020 
B) $3,210 
C) $5,190 
D) $2,810

Quizplus · Accepted Answer

Using the average-cost method, we calculate the weighted average cost per unit as [(200*4)+(300*5)+(100*6)] / (200+300+100) = $4.83. 
Therefore, cost of goods sold is calculated as (300+100-150)*$4.83 = $1,189.50 + $1,950 = $5,139.50. Rounded to the nearest whole dollar, the cost of goods sold is $5,190. Therefore, the answer is option C.

Use This Inventory Information for the Month of March to Answer