The ABC Enterprise Company uses the perpetual inventory system. The company has the following data available for the month of April:
Date
Transaction
Units
Unit Cost
April 1
Beginning inventory
200
$1.00
April 9
Purchase
300
$1.10
April 10
Sale
400
April 15
Purchase
400
$1.16
April 18
Sale
300
April 24
Purchase
100
$1.26
What is the cost of ending inventory on April 30 using moving average?
A) $354
B) $336
C) $342
D) $310
Answer: A
Explanation: A)
Cost of Goods Sold
Ending Inventory
4/9
= $1.06
4/10
400 × $1.06 = $424
100 × $1.06 = $106
4/15
100 × $1.06 = $106
Add: 400 × $1.16 = $464
Total: $570 / 500 = $1.14
4/18
300 × $1.14 = $342
200 × $1.14 = $228
4/24
200 × $1.14 = $228
Add: 100 × $1.26 = $126
Total: $228 + $126 = $354
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