SassyCat, Inc. had the following inventory data:
Assuming average cost, what is the cost of goods sold for the July 14 sale?
A) $331
B) $438
C) $448
D) $432
B) $438
Explanation: [(July 1 unit cost × 5) + (July 4 unit cost × 10)]/15 = average cost; take this × 12 for amount to subtract from balance; then (unit cost July 11 × 9) + balance/12 = average cost; take this × 8. Ex: [($55 × 5) + ($58 × 10)]/(5 + 10) = $57; $57 × 12 = $684; ($(55 × 5) + $(58 × 10)) - $684 = $171; [(9 × $54) + $171]/12 = $55; $55 × 8 = $438.
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