Question

Blue Spruce Corporation uses a perpetual inventory system. On November 19, the company sold 610 units. The following additional information is available:

		Units			Unit Cost			Total Cost
Nov. 1 inventory		310			$12			$3,720
Nov. 15 purchase		470			14			6,580
Nov. 23 purchase		390			17			6,630
		1,170						$16,930

(a)

Calculate the November 30 inventory and the November cost of goods sold, using the moving-average cost formula. (Round unit cost to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places. e.g. 5,275.)

Cost of Goods Sold		$	enter a dollar amount rounded to 0 decimal places
Ending Inventory		$	enter a dollar amount rounded to 0 decimal places

Answer 1

cost of goods sold

while using moving average method units are costed at weighted average cost per unit

weighted average cost per unit=total cost/total units

on november 19

total cost=$3720+$6580=$10300

total units=310+470=780

weighted average cost per unit=$10300/780=$13.20

cost of goods sold=610*$13.20=$8052

ending inventory

on november 30

total cost=(170*$13.20)+$6630=$8874

total units=170+390=560 units

weighted average cost per unit=$8874/560=$15.85 per unit

ending inventory value=$15.85*560=$8876

note: there is a slight difference in the total cost while calculating normal cost value and weighted average value.it is because of rounding the weighted average cost per unit into 2 decimal point. you will get the exact cost when you take the exact weighted average cost per unit ($15.84642857)