A Company Uses the Weighted-Average Method of Inventory Valuation Under

question 27

Multiple Choice

A company uses the weighted-average method of inventory valuation under a periodic inventory system. The company began the year with a zero inventory balance. They had the following transactions during the year.
1) Purchased 65 units at $7 per unit
2) Purchased 130 units at $7 per unit
3) Sold 110 units at $11 per unit
4) Purchased 55 units at $8 per unit
5) Sold 110 units at $13.25 per unit
At the end of the year, the company counted the inventory and found 30 units remaining. Calculate the cost of goods sold for the year. (Round the unit costs to two decimal places and total costs to the nearest dollar.)

• A) $7
• B) $217
• C) $1,805
• D) $1,588

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Definitions:

Larva

A larva is the juvenile form of many animals, which undergoes metamorphosis before becoming an adult, often differing markedly in form and behavior from the adult stage.

Develop

To undergo gradual growth or formation; often refers to the process of bringing new products, technologies, or ideas into existence.

Accumulated Degree Hours

A measure used in forensic entomology and agriculture to estimate the development stage of organisms by accumulating the degrees above a threshold temperature over time.

Larva

The juvenile form of an animal that undergoes metamorphosis, such as an insect or amphibian, typically different in form from the adult.