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Lux Company started the month with 20 lamps in its beginning inventory that cost $30 each. During the month, Lux purchased 80 additional lamps for $31 each. At the end of the month, Lux counted its inventory and found that 25 lamps remained unsold. If Lux uses periodic weighted average cost, its Cost of Goods Sold for the month is ______.

Respuesta :

Lux Company started the month with 20 lamps in its beginning inventory that cost $30 each. During the month, Lux purchased 80 additional lamps for $31 each. At the end of the month, Lux counted its inventory and found that 25 lamps remained unsold. If Lux uses periodic weighted average cost, its Cost of Goods Sold for the month is $2,310.

To calculate the periodic weighted average cost, you need to calculate the total expenditure = 20 × $30 + 80 × $31 = $600 + $2480 = $3080

Now out of 100 lamps only 75 lamps are sold and 25 are unsold then

periodic weighted average cost = $3080 × 75 ÷ 100 = $2310

What is Periodic Weighted Average Cost?

  • In a periodic inventory system, calculations using the average cost technique are performed at the conclusion of the accounting period.
  • Average cost technique contains the weighted average cost based on the price of the initial inventory plus all purchases made during that period.
  • The units sold and the inventory-held units are then charged with this average cost per unit.

What is the Weighted Average Cost Formula?

  • The weighted average cost per unit of inventory can be calculated using the average cost method (AVCO).
  • It is used to determine the cost of ending inventory and the cost of goods sold over a certain time period.
  • The following formula is used to compute weighted average cost per unit:

Weighted Average Unit Cost  = Total Cost of Inventory ÷ Total Units in Inventory

Know more about Weighted Average Cost https://brainly.com/question/28042295

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