Question

Glassworks Ltd. uses the periodic inventory system. Calculate Glassworks’ cost of goods sold, gross margin, and ending inventory for the month of July using weighted average. All of the units sold were priced at $20 per unit.

			Units		Cost/Unit		Amount
July 1		Beginning inventory		4,000		$12.00		$48,000
4		Purchase		6,000		$12.50		75,000
8		Sale		6,590
14		Sale		1,410
22		Purchase		5,000		$12.75		63,750
28		Sale		2,960

Answer 1

	Units	Cost/Unit	Total cost
July 1	4000	12.00	48000
July 4	6000	12.50	75000
July 22	5000	12.75	63750
Total	15000		186750
Average cost per unit	12.45	=186750/15000
Total units sold	10960	=6590+1410+2960
Ending inventory units	4040	=15000-10960
1
Cost of goods sold	136452	=10960*12.45
2
Sales revenue	219200	=10960*20
Less: Cost of goods sold	136452
Gross margin	82748
3
Ending inventory	50298	=4040*12.45