Question

Practice Question 51 A company just starting a business made the following inventory transactions in August: Purchase on August 1 300 units $1,560 Sale on August 8 200 units 3,400 Purchase on August 12 400 units 1,340 Sale on August 24 350 units 5,950 Using the average cost perpetual inventory method, how much is the average cost of the units sold on August 24? A$9.80

B$3.72

C$4.28

D:4.14

Answer 1

Date	Purchases			Cost of goods sold			Inventory on Hand
	Quantity	Unit cost	Total Cost	Quantity	Unit cost	Total Cost	Quantity	Unit Cost	Total Cost
Aug-01	300	5.2	1,560				300	5.2	1,560
Aug-08				200	5.2	1,040	100	5.2	520
Aug-12	400	3.35	1,340				500	3.72	1,860
Aug-24				350	3.72	1,302	150	3.72	558
Total						2,342			558

Average cost of units sold on August 24 = $3.72.

Correct option is B.

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