Question

Vaughn uses the periodic inventory system. For the current month, the beginning inventory consisted of 7300 units that cost $14 each. During the month, the company made two purchases: 3000 units at $15 each and 12200 units at $15.50 each. Vaughn also sold 12900 units during the month. Using the average cost method, what is the amount of cost of goods sold for the month?

$199600.

$187500.

$193500.

$192855.

Carla Company uses a periodic inventory system. For April, when the company sold 550 units, the following information is available.

		Units		Unit Cost		Total Cost
April 1 inventory		230		$26			$ 5,980
April 15 purchase		360		31			11,160
April 23 purchase		410		34			13,940
		1,000					$31,080

Compute the April 30 inventory and the April cost of goods sold using the FIFO method.

Ending inventory		$
Cost of goods sold		$

Vaughn Manufacturing uses the periodic inventory system. For the current month, the beginning inventory consisted of 400 units that cost $63 each. During the month, the company made two purchases: 700 units at $66 each and 600 units at $68 each. Vaughn Manufacturing also sold 1110 units during the month. Using the average cost method, what is the amount of ending inventory?

$72080.

$73260.

$40120.

$38940.

Answer 1

a) Calculate following

	Unit	Unit Cost	Total cost
Beginning Inventory	7300	14	102200
Purchase 1	3000	15	45000
Purchase 2	12200	15.50	189100
	22500		336300

Cost of goods sold under average cost = 336300/22500*12900 = 193500

So answer is c) $193500

2)

Compute the April 30 inventory and the April cost of goods sold using the FIFO method.

Ending inventory		410*34+40*31 = 15180
Cost of goods sold		$31080-15180 = 15900

3) Calculate following

	Unit	Unit Cost	Total cost
Beginning Inventory	400	63	25200
Purchase 1	700	66	46200
Purchase 2	600	68	40800
	1700		112200

Ending inventory under average cost = 112200/1700*590 = 38940

So answer is d) $38940