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14 May, 08:35

Mountain Made started the month with 3 quilts in its beginning inventory that cost $200 each. During the month, Mountain Made purchased 7 additional quilts for $210 each. At the end of the month, Mountain Made counted its inventory and found that 2 quilts remained unsold. If Mountain Made uses periodic weighted average cost, its Cost of Goods Sold for the month is:

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  1. 14 May, 09:45
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    Cost of Goods Sold for the month is $1656

    Explanation:

    Weighted Average Cost System calculates a new average for goods after each purchase.

    Mountain Made Inventory Balance runs as follows:

    At Beginning:

    (3 quilts * $200) = $600

    After Purchased of 7 additional quilts for $210 each:

    (3 quilts * $200) + (7 quilts * $210) = $2070

    New Inventory Cost = $2070/10quilts = $207 each

    At end

    2 quilts remained unsold. Therefore sold quilts were 8 ie (10quilts-2quilts)

    Therefore cost of sold quilts is 8 * $207 = $1656
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