PRC-1 · Chapter 7 · Question 81 of 100
An entity had opening inventory of 36,000 units @ Rs. 3.9 per unit. During the month, it purchased 41,000 units @ Rs. 4.5 per unit. Sales were 60,000 units. Using the continuous weighted average method, what is the value of the cost of goods sold?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 253,200
Explanation
Total units = 36,000 + 41,000 = 77,000. Total cost = (36,000 x 3.9) + (41,000 x 4.5) = 140,400 + 184,500 = 324,900. Average cost per unit = 324,900 / 77,000 = Rs. 4.21948. Cost of goods sold = 60,000 x 4.21948 = 253,168.8 (rounded in typical exams to 253,200).
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