On January 1, 2007, Nichols Company's inventory of Item X consisted of 2,000 units that cost $8 each. During 2007 the company pu

The cost of goods sold calculated using the weighted-average method in a periodic inventory system is $42,429.

Initially, we need to find the weighted average cost per unit before calculating the cost of goods sold.

The following formula will guide us:

= (Initial units × cost per unit + purchased units × cost per unit) ÷ (initial units + purchased units)

= (2,000 units × $8 + 5,000 units × $10) ÷ (2,000 units + 5,000 units)

= ($16,000 + $50,000) ÷ (7,000 units)

= $66,000 ÷ 7,000 units

= $9.428

Next, we calculate the cost of goods sold with the weighted-average cost:

= Number of units sold multiplied by average cost per unit

= 4,500 units × $9.428

= $42,429

This leads us to conclude that the cost of goods sold using the weighted-average method under periodic inventory stands at $42,429.

Learn more about the cost of goods sold here:

Answer:

The total cost of goods sold amounted to roughly $42,435.

Explanation:

Calculate the cost of goods as of January 1st:

2000 units at $8 each

$16,000

Calculate the cost of goods for the year 2007:

5000 units at $10 each

$50,000

Now, apply the formula for weighted-average cost:

WAC per unit = total cost of goods available for sale / total units available for sale

WAC per unit = 16,000 + 50,000 / 2000 + 5000

WAC per unit = 66,000 / 7000

WAC per unit = 9.42857..... Rounding gives a dollar value

WAC per unit = 9.43

For the cost of goods sold:

4,500 × 9.43 (note that 9.43 is rounded)

$42,435