I'm so confused and don't know where to start

Question

Dunbar Distribution markets CDs of numerous performing artists. At the beginning of March, Dunbar had in beginning inventory 3,575 CDs with a unit cost of $10. During March, Dunbar made the following purchases of CDs.

March 5 2,860 @ $11 March 21 7,150 @ $14
March 13 5,005 @ $13 March 26 2,860 @ $16

During March 17,160 units were sold. Dunbar uses a periodic inventory system.



Collapse question part
(a) Determine the cost of goods available for sale.

The cost of goods available for sale
$

(b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.)

Average Cost
$

Answer 1

Periodic Inventory System (Units available for sale, at the beginning of next accounting period, are counted at the end of current accounting period which must match total units available for sale in current period less sale during current period):

Total Units that were available for Sale (Just beginning inventory + Purchases), in current period, regardless of sale:

   Inventory, begin         3,575@$10; cost = $35,750
   5-Mar Purchase          2,860@11; cost = $31,460
   13-Mar Purchase        5,005@13; cost = $65,065
   21-Mar Purchase        7,150@14; cost = $100,100

   26-Mar Purchase        2,860@16; cost = $45,760

So, total units available for sale is 21,450, regardless of March Sale

cost of total units available for sale is $278,135, regardless of March Sale 

(b) Average cost of units available for sale in current period is $12.967 = $278,135/21,450 regardless of March Sale

 

Now, consider the March Sale of 17,160 units

(a) Units available for sale, counted at end of March after March Sale, must be 4,290 = 21,450-17,160

Therefore, cost of goods available for sale, after March Sale, will be $55,627 = 4,290 * $12.967

 

Note: Beginning inventory for the next month, April, will be 4,290 units priced at $12.967 per unit.