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Inventory records for Eliza Company revealed the following: Date Transaction Number of Units Unit CostMarch 1 Beginning Inventory 1,070 $ 7.13March 10 Purchase 590 7.30March 16 Purchase 880 7.41March 23 Purchase 540 7.66Eliza sold 2,200 units of inventory during the month. What is the cost of goods sold assuming weighted-average cost? (Round the weighted-average unit cost to 4 decimals if necessary and round your final answer to nearest whole dollar.)Multiple Choice$16,060$16,138$16,225$15,686

Question

Inventory records for Eliza Company revealed the following: Date Transaction Number of Units Unit CostMarch 1 Beginning Inventory 1,070 7.13March10Purchase5907.30March16Purchase8807.41March23Purchase5407.66Elizasold2,200unitsofinventoryduringthemonth.Whatisthecostofgoodssoldassumingweighted−averagecost?(Roundtheweighted−averageunitcostto4decimalsifnecessaryandroundyourfinalanswertonearestwholedollar.)MultipleChoice 7.13March 10 Purchase 590 7.30March 16 Purchase 880 7.41March 23 Purchase 540 7.66Eliza sold 2,200 units of inventory during the month. What is the cost of goods sold assuming weighted-average cost? (Round the weighted-average unit cost to 4 decimals if necessary and round your final answer to nearest whole dollar.)Multiple Choice16,06016,13816,13816,225$15,686

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Solution

To calculate the cost of goods sold using the weighted-average cost method, we first need to calculate the total cost of all units available for sale and the total number of units available for sale.

From the data given:

  • On March 1, there were 1,070 units at 7.13each,foratotalcostof7.13 each, for a total cost of 7.13 * 1,070 = $7,629.10
  • On March 10, 590 units were purchased at 7.30each,foratotalcostof7.30 each, for a total cost of 7.30 * 590 = $4,307.00
  • On March 16, 880 units were purchased at 7.41each,foratotalcostof7.41 each, for a total cost of 7.41 * 880 = $6,520.80
  • On March 23, 540 units were purchased at 7.66each,foratotalcostof7.66 each, for a total cost of 7.66 * 540 = $4,136.40

So, the total cost of all units available for sale is 7,629.10+7,629.10 + 4,307.00 + 6,520.80+6,520.80 + 4,136.40 = $22,593.30

The total number of units available for sale is 1,070 + 590 + 880 + 540 = 3,080 units

The weighted-average cost per unit is therefore 22,593.30/3,080=22,593.30 / 3,080 = 7.3349 (rounded to four decimal places)

Eliza sold 2,200 units during the month, so the cost of goods sold is 2,200 * 7.3349=7.3349 = 16,136.78

Rounding to the nearest whole dollar, the cost of goods sold is $16,137.

So, the closest answer among the choices is $16,138.

This problem has been solved

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