question archive In a perpetual average cost system: A
In a perpetual average cost system: A
Subject:BusinessPrice:2.88 Bought3
In a perpetual average cost system:
A. A new weighted-average unit cost is calculated each time additional units are
purchased.
B. The cost allocated to ending inventory is generally the same as it would be in a
periodic inventory system.
C. The moving-average unit cost is determined following each sale.
D. The average is determined by dividing the total number of units sold by the cost of
units purchased during the period.
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Answer choice: A. A new weighted-average unit cost is calculated each time additional units are purchased.
Explanation:
The perpetual average cost system uses a moving average cost model. Each time that a new inventory purchase is made a new average cost is computed. This is done by taking the total cost of units available for sale and dividing that by the total number of units available for sale.
