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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

### 1 Answer by Expert Tutors

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)