Questions: Determine cost of goods sold during the period under a periodic inventory system using the average-cost method. (Round ave cost per unit to 3 decimal places, e.g. 12.502 and final answer to 0 decimal places, e.g. 1,250.)

Solution Steps

To determine the cost of goods sold (COGS) during the period under a periodic inventory system using the average-cost method, follow these steps:

1. Calculate the Average Cost per Unit:

   • Sum the total cost of all inventory available for sale.
   • Sum the total number of units available for sale.
   • Divide the total cost by the total number of units to get the average cost per unit.

2. Calculate the Cost of Goods Sold:

   • Multiply the average cost per unit by the number of units sold during the period.

Let's break down the steps with a hypothetical example:

• Beginning Inventory: 100 units at $10 each
• Purchases during the period:
  • 200 units at $12 each
  • 150 units at $11 each
• Units sold during the period: 300 units

1. Total Cost of Inventory Available for Sale:

   • Beginning Inventory: \( 100 \text{ units} \times \$10 = \$1,000 \)
   • First Purchase: \( 200 \text{ units} \times \$12 = \$2,400 \)
   • Second Purchase: \( 150 \text{ units} \times \$11 = \$1,650 \)
   • Total Cost: \( \$1,000 + \$2,400 + \$1,650 = \$5,050 \)

2. Total Units Available for Sale:

   • Beginning Inventory: 100 units
   • First Purchase: 200 units
   • Second Purchase: 150 units
   • Total Units: \( 100 + 200 + 150 = 450 \text{ units} \)

3. Average Cost per Unit:

   • Average Cost per Unit: \( \frac{\$5,050}{450 \text{ units}} = \$11.222 \) (rounded to 3 decimal places)

4. Cost of Goods Sold:

   • Units Sold: 300 units
   • Cost of Goods Sold: \( 300 \text{ units} \times \$11.222 = \$3,367 \) (rounded to 0 decimal places)

Final Answer: