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Jamal uses the AVCO system to value his inventory.

He provides the following information:
March 1 no opening inventory
         6 60 units were purchased at $120 per unit
        17 100 units were purchased at $116 per unit
        23 110 units were sold for $150 per unit
What was the cost of sales for March? A $5875 B $12 925 C $13 000 D $18 800

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Ayesha A. | Believe in the process of learning and helping others learnBelieve in the process of learning and h...
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k so i think the above no. are like this

Opening Inventory ..........................Nil
Units Purchased March 6 ................. 60 at $120 per unit
units purchased March 17 ................100 at $116 per unit
Units sold March 23..........................110 at $150 per unit

Average cost = Total cost of units available for sale / no. of units available for sale
 
Opening Inventory cost.............................$0
Units purchased March 6...........(60*120) = $7,200
Units Purchased cost March ......(100*116) = $11,600
Total costs of units available for sale            =  $18,800
No. of units available for sale 160

Average cost = $18,800/160 = $117.5
Multiplying the average cost with units sold gives you $12,925 (117.5 * 110)

So the answer is B

Comments

Previously due to format of the question i read the March 6, March 17 as numbers and not as dates