Acme sells 150 units during this quarter. If Acme uses the weighted average method, what is its cost of goods sold for the quarter?
A) $600
B) $705
C) $750
D) $900

Question

Quizplus · Accepted Answer

Since the problem does not provide the unit cost for Acme, we cannot calculate the cost of goods sold using the traditional formula (COGS = beginning inventory + purchases - ending inventory). Instead, we need to use the weighted average method.

First, we need to calculate the weighted average cost per unit. Let's say that Acme had 100 units that it purchased for $4 each, and 50 units that it purchased for $7 each. The weighted average cost per unit would be:

[(100 units x $4) + (50 units x $7)] / 150 units = $4.33 per unit

Next, we can calculate the cost of goods sold using this weighted average cost per unit:

150 units x $4.33 per unit = $649.50

Therefore, the closest answer choice is B, $705.

Acme Sells 150 Units During This Quarter