The weighted-average cost method is used by Mendez, Inc. Sales are $80,000, the number of units available for sale is 100, the number of units sold during the period is 75, and the weighted-average cost of the goods available for sale is $200 each.
How much is gross profit for the company?
A) $10,000
B) $15,000
C) $20,000
D) $65,000

Question

Quizplus · Accepted Answer

The gross profit is calculated by subtracting the cost of goods sold (COGS) from the sales. The COGS is the number of units sold multiplied by the weighted-average cost per unit. Here, COGS = 75 units * $200/unit = $15,000. Therefore, gross profit = Sales - COGS = $80,000 - $15,000 = $65,000.

The Weighted-Average Cost Method Is Used by Mendez, Inc