Question

The following transactions took place in October for Roland Corporation. The opening inventory was 120 units purchased for $174 each.

October 5th	sold 40 units
October 7th	purchased 76 units for $90 each

Under a perpetual weighted average system, what is the cost of goods sold for October?

Select one:

a. $6960

b. $20880

c. $3600

d. $5657

Answer 1

Answer- Under a perpetual weighted average system, the cost of goods sold for October is = $6960.

Explanation-

Weighted Average cost Method
Goods purchased			Cost of goods sold			Inventory balance
Date	# of units	Cost per unit	# of units sold	Cost per unit	Cost of goods sold	# of units	Cost per unit	Inventory balance
Oct-01						120	174	20880
Oct-05			40	174	6960	80	174	13920
Average Cost						80	174	13920
Oct-07	76	90				80	174	13920
						76	90	6840
Average Cost						156	133	20760
Totals $			40		6960	156		20760