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Easton Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2019: Date Activity Quantity Unit Price 5/1 Beginning Inventory 140 $11 5/5 Purchase 120 $13 5/15 Purchase 300 $15 5/25 Purchase 450 $17 Sales were 440 units at $25
Easton Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2019:
Date Activity Quantity Unit Price
5/1 Beginning Inventory 140 $11
5/5 Purchase 120 $13
5/15 Purchase 300 $15
5/25 Purchase 450 $17
Sales were 440 units at $25. Using the Weighted Average method, determine the dollar value of Cost of Goods Sold for the month of May.
Expert Solution
Computation of the dollar value of cost of goods sold:-
Weighted average cost per unit = Total cost / Total number of units
= ((140 * $11) + (120 * $13) + (300 * $15) + (450 * $17)) / (140 + 120 + 300 + 450)
= ($1,540 + $1,560 + $4,500 + $7,650) / 1,010
= $15,250 / 1,010
= $15.10
Cost of goods sold = Number of units sold * Weighted average cost per unit
= 440 * $15.10
= $6,643.56
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