Question

The following amounts and costs of platters were available for sale by Southwest Pottery during 2019: Beginning inventory 10 units at $123 First purchase 15 units at $165 Second purchase 30 units at $210 Third purchase 25 units at $195 Southwest Pottery, which uses a periodic inventory system, has 35 platters on hand at the end of the year. How much is cost of goods sold in dollars at the end of the year according to the weighted-average cost method?

Answer 1

	Unit	Rate	Amount
Beginning inventory	10	$ 123	$     1,230
1st Purchase	15	$ 165	$     2,475
2nd Purchase	30	$ 210	$     6,300
3rd Purchase	25	$ 195	$     4,875
Total	80		$   14,880

Weighted average cost per unit ($14,880/80)

$ 186

Cost of goods sold (80-35)*$186

$ 8,370

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