Question

During the year, Hayward Corp, sold shoes for $35 per pair. At the end of the year, 5000 pairs of shoes remain unsold. facts related to the beginning inventory and purchases are as follows:

Beginning inventory 4000 pairs @ $13

February 1- Purchase 7000 pairs @ $14

May 1 Purchase 5000 pairs @ $15

August 1 Purchase 3000 pairs @ $16

November 1 Purchase 6000 pairs @ $17

Using the weighted average method, what is Cost of goods sold?

a)$75,000

b) $290,000

c)$300,000(answer)

d)$309,000

e)$375,000

Answer:C

hi can anyone help me with this question please? I know the answer is "C" but I wanted to know how to solve it. thanks in advance!

Answer 1

SOLUTION

Cost of goods sold is $300,000.

Calculation of  cost of goods available for sale-

Date	Particulars	Calculation	Amount ($)
Jan.1	Beginning inventory	4,000 pairs @ $13	52,000
Feb.1	Purchase	7,000 pairs @ $14	98,000
May 1	Purchase	5,000 pairs @ $15	75,000
Aug.1	Purchase	3,000 pairs @ $16	48,000
Nov.1	Purchase	6,000 pairs @ $17	102,000
	Cost of goods available for sale		375,000

Total units = 4,000 + 7,000 + 5,000 + 3,000 + 6,000 = 25,000

Weighted-average cost per unit = Cost of goods available for sale / Total units

= $375,000 / 25,000 = $15 per unit

Goods sold = Total units - Units unsold

= 25,000 - 5,000 = 20,000

Cost of goods sold = Weighted-average cost per unit * Goods sold

= $15 * 20,000 = $300,000