Question

Date Number of units Cost per unit Total cost November 1 Inventory, beginning 600 $20.25 $12,150 November 15 Purchase 1,000 $20.26 $20,260 November 24 Purchase 300 $20.28 $6,084 Power Surge Systems (a calendar year end business) uses a periodic inventory system. Its records show the following for the month of November, in which 1,500 units were sold for a total of $42,000 cash: Power Surge Systems uses an average cost inventory costing method to compute cost of goods sold and value ending inventory. Compute gross profit under the average cost inventory costing method for the month of November for Power Surge Systems.

          Date Number of units Cost per unit Total cost November 1 Inventory, beginning 600 $20.25 $12,150 November 15 Purchase 1,000 $20.26 $20,260 November 24 Purchase 300 $20.28 $6,084 Power Surge Systems (a calendar year end business) uses a periodic inventory system. Its records show the following for the month of November, in which 1,500 units were sold for a total of $42,000 cash: Power Surge Systems uses an average cost inventory costing method to compute cost of goods sold and value ending inventory. Compute gross profit under the average cost inventory costing method for the month of November for Power Surge Systems.

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