A corporation has provided the following information about one of their products: DateTransactionNumber of UnitsCost per Unit1/1Beginning inventory200$1406/5Purchase400$16011/10Purchase100$200 During the year, 400 units were sold. What is cost of goods sold using the average cost method?Group of answer choicesA)$48,000b)$64,000C)$50,000d)$66,667E)None of the above

Under average cost method, cost of goods sold is calculated on the basis of a weighted average cost. Such cost is calculated by dividing the aggregate cost of units in the beginning inventory and cost units purchased during the period by the aggregate number of units in the beginning inventory and units purchased during the period.Answer) Calculation of cost of goods sold using Average cost method Date Transaction Number of units Cost per unit Total Cost 1/1 Beginning Inventory 200 $ 140 $ 28,000 6/5 Purchase 400 $ 160 $ 64,000 11/10 Purchase 100 $ 200 $ 20,000 Total 700 $112,000 Weighted Average cost = $ 112,000/ 700 units = $ 160 per unit Cost of goods sold = Number of units sold X weighted average cost per unit = 400 units X $ 160 per unit = $ 64,000 Therefore, cost of goods sold under average cost method is $ 64,000.

Answered: A corporation has provided the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A corporation has provided the following information about one of their products:

Date	Transaction	Number of Units	Cost per Unit
1/1	Beginning inventory	200	$140
6/5	Purchase	400	$160
11/10	Purchase	100	$200

During the year, 400 units were sold.

What is cost of goods sold using the average cost method?

Group of answer choices

A)$48,000

b)$64,000

C)$50,000

d)$66,667

E)None of the above

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