A company has a beginning inventory of $20,000 and purchases during the year of $140,000. The beginning inventory consisted of 2,000 units and 7,000 units were purchased during the year. The company has 5,000 units left at yearminusend. Under averageminus cost, what is Cost of Goods Sold? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)

Question

Business

Jacqueline Waller

9 June, 03:12

A company has a beginning inventory of $20,000 and purchases during the year of $140,000. The beginning inventory consisted of 2,000 units and 7,000 units were purchased during the year. The company has 5,000 units left at yearminusend. Under averageminus cost, what is Cost of Goods Sold? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)

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Answers (1)

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Markus Jordan · Answer 1

The average cost per unit is: $15.00

Explanation:

Inventory is one of the most important assets to track in terms of valuation. Not only does it contribute to current assets on the balance sheet, but the cost of inventory sold is included in the cost of goods sold on the income statement. In other words, failure to understand the value of inventory can impact values on the income statement, balance sheet and cash flow statement so it's important to get it right.