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    Cost of Goods Sold - Average cost method inventory costing

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    Bubba's Hardware Store sells sheets of sandpaper in bulk. On October 1st, Bubba had 4000 sheets of sandpaper at an average cost of $.25 each. The store also made the following purchase of sandpaper inventory during the month:

    Date Units Purchased Cost per Unit Total Cost
    10/3 8000 $0.24 $1,920
    10/17 3000 $0.26 $780
    10/21 6000 $0.28 $1,680
    10/29 4000 $0.27 $1,080
    Total 21000 - $5,460

    If the store sold 23,000 sheets of sandpaper during October, which is cost of goods sold using the average cost method of inventory costing? Please describe your answer in detail.

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    Solution Summary

    The solution finds out cost of Goods Sold using average cost method of inventory costing for Bubba's Hardware Store.