Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales: August 2 10 units were purchased at $12 per unit. August 18 15 units were purchased at $14 per unit. August 29 12 units were sold. What is the amount of the cost of goods sold for this sale? (Round average cost per unit to 2 decimal places.)

Answer: $158.40

Explanation:

The Costs of Goods sold is the amount that it cost a company to acquire or produce the products that it is selling.

Marquis Company uses a weighted-average perpetual inventory system which means that the cost of goods purchased at different times should have their costs averaged so that only one cost is recognised.

Marquis purchased 10 units for $12 and 15 units for $14.

This means that they spent the following on purchases,

= (10*12) + (15*14)

= 120 + 210

= $330

The amount of units purchased was,

= 10 units + 15 units

= 25 units.

The average price will therefore be,

= 330/25

= $13.20 per unit.

12 units were sold at the Weighted Average Cost which is $13.2.

The Cost of Goods sold is therefore,

= 12 * 13.2

= $158.4