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

question 113

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 62 units at $7 per unit
2.Purchased 110 units at $7 per unit
3.Sold 90 units at $10 per unit
4.Purchased 50 units at $8 per unit
5.Sold 90 units at $13.50 per unit
At the end of the year,the company counted the inventory and found 42 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)$304
• C)$1,604
• D)$1,300

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Definitions:

Manufacturing Costs

Expenses directly related to the production of goods, including direct labor, direct materials, and manufacturing overhead.

Selling and Administrative Expenses

Costs related to the selling of products and the general administration of a business.

Differential Income

The difference in income between two alternative decisions or scenarios, used in managerial decision-making to determine the better financial option.

Variable Cost

Expenses that change in proportion to the amount of goods produced or the volume of sales.