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

question 140

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 $6 per unit
2) Purchased 130 units at $6 per unit
3) Sold 110 units at $12 per unit
4) Purchased 60 units at $7 per unit
5) Sold 110 units at $13.25 per unit
At the end of the year,the company counted the inventory and found 35 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) $6
• B) $218
• C) $1,590
• D) $1,372

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Definitions:

Average Revenue

The revenue earned per unit of output sold, calculated by dividing total revenue by the number of units sold.

Market Structures

The organizational and other characteristics of a market, including the level of competition, product differentiation, and the ease of entry and exit, which determine the nature of pricing and output decisions.

Purely Competitive Firm

A company operating in a market with many sellers offering identical products, where no single seller can influence the market price.

Downward-sloping

A description of a line or curve on a graph that represents a decrease in one variable in response to an increase in another variable, commonly used to describe demand curves in economics.