To calculate the cost of goods sold (COGS) and the ending inventory, we need to calculate the total cost of the inventory purchased during the month and subtract the cost of goods sold.
1. Calculate the total cost of inventory purchased:
August 8: 14,500 units x $6.40 = $92,800
August 18: 8,700 units x $6.00 = $52,200
August 28: 4,900 units x $5.80 = $28,420
Total cost of inventory purchased = $92,800 + $52,200 + $28,420 = $173,420
2. Calculate the cost of goods sold:
August 14: 11,600 units x $7.00 = $81,200
August 25: 10,600 units x $7.00 = $74,200
Cost of goods sold = $81,200 + $74,200 = $155,400
3. Calculate the ending inventory:
August 1: 2,900 units x $7.00 = $20,300
Add the units purchased after August 1:
August 8: 14,500 units
August 18: 8,700 units
August 28: 4,900 units
Total units purchased = 14,500 + 8,700 + 4,900 = 28,100
Total units on hand at the end of August = 28,100 + 2,900 = 31,000
Ending inventory = 31,000 units x $7.00 = $217,000
Therefore, the COGS for the month of August is $155,400 and the ending inventory is $217,000.
Altira Corporation provides the following information related to its inventory during the month of August 2024: August 1 Inventory on hand—2,900 units; cost $7.00 each. August 8 Purchased 14,500 units for $6.40 each. August 14 Sold 11,600 units for $12.90 each. August 18 Purchased 8,700 units for $6.00 each. August 25 Sold 10,600 units for $11.90 each. August 28 Purchased 4,900 units for $5.80 each. August 31 Inventory on hand—8,800 units.
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