Answered

At Westonci.ca, we connect you with the answers you need, thanks to our active and informed community. Get detailed and accurate answers to your questions from a community of experts on our comprehensive Q&A platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

On January 1, 2007, Nichols Company's inventory of Item X consisted of 2,000 units that cost $8 each. During 2007 the company purchased 5,000 units of Item X at $10, each, and it sold 4,500 units. Periodic inventory procedure is used. Cost of goods sold using weighted-average cost is:

Sagot :

vanillanekox3

Answer:

For the cost of goods sold, the company made around $42,435

Explanation:

Solve cost of goods for Jan. 1st:

2000 units × $8

$16,000

Solve for cost of goods during 2007:

5000 units × $10

$50,000

Use the formula for weighted-average cost:

WAC per unit = cost of goods available for sale / units available for sale

WAC per unit = 16,000 + 50,000 / 2000 + 5000

WAC per unit = 66,000 / 7000

WAC per unit = 9.42857..... I will round to a dollar value

WAC per unit = 9.43

For cost of goods sold:

4,500 × 9.43 (please keep in mind 9.43 is a rounded number)

$42,435

The cost of goods sold using  weighted-average cost under Periodic inventory is $42,429

Before calculating the cost of goods sold, first we have to determine the weighted average cost per unit.

For this following formula should be used:

= (Opening units × cost per unit + purchased units × cost per unit) ÷ (opening units + purchased units)

= (2,000 units × $8 + 5,000 units × $10) ÷ (2,000 units + 5,000 units)

= ($16,000 + $50,000) ÷ (7,000 units)

= $66,000 ÷ 7,000 units

= $9.428

Now the cost of goods sold using  weighted-average cost is

= Number of units sold × average cost per unit

= 4,500 units × $9.428

= $42,429

Hence, we conclude that the cost of goods sold using weighted-average cost under Periodic inventory is $42,429.

Learn more about the cost of goods sold here: brainly.com/question/14292529

Thanks for using our platform. We're always here to provide accurate and up-to-date answers to all your queries. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.