The Nansen Company uses the perpetual inventory system and the moving - average method to value inventories. In August, there were 10,000 units valued at $30,000 in the beginning inventory. On August 10, 20,000 units were purchased for $6 per unit. On August 15, 24,000 units were sold for $12 per unit. The amount charged to cost of goods sold on August 15 was:

Question

Anya Casey

Business

19 March, 00:39

The Nansen Company uses the perpetual inventory system and the moving - average method to value inventories. In August, there were 10,000 units valued at $30,000 in the beginning inventory. On August 10, 20,000 units were purchased for $6 per unit. On August 15, 24,000 units were sold for $12 per unit. The amount charged to cost of goods sold on August 15 was:

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Answers (1)

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Zaire White · Answer 1

COGS = $120,000

Explanation:

We have to determine the average cost per unit:

10,000 units at $3 per unit, total cost $30,000 20,000 units at $6 per unit, total cost $120,000

There are 30,000 units with a total cost of $150,000. The average cost per unit = $150,000 / 30,000 units = $5 per unit

On August 15, 24,000 units were sold and the COGS was $120,000 ( = 24,000 units x $5 per unit)