question archive George Washington UniversityACCY 2001 Maxim Corp
George Washington UniversityACCY 2001 Maxim Corp
Subject:FinancePrice:2.87 Bought7
Maxim Corp. has provided the following information about one of its products:
|
Date |
Transaction |
Number of Units |
Cost per Unit |
|
01/1 |
Beginning Inventory |
200 |
$140 |
|
06/5 |
Purchase |
400 |
$160 |
|
11/10 |
Purchase |
100 |
$200 |
During the year, Maxim sold 400 units.
What is cost of goods sold using the average cost method?
A) $48,000.
B) $64,000.
C) $50,000.
D) $62,000.
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Answer:
cost of goods sold using the average cost method
B) $64,000.
Step-by-step explanation
Average cost = Total cost / No. of units
= ((200*140)+(400*160)+(100*200))/(200+400+100)
= $160
Cost of goods sold = No. of units sold * Average cost
= 400 * 160
= $64000
