RZM Store sells jeans. During January 2014, its inventory records for one brand of designer jeans were as follows: The cost of goods sold using the periodic average cost method is:

Quantity Price per pair Total
Beginning Inventory 10 pairs $20 $200
January 6 Purchase 4 pairs $25 $100
January 10 Sale 5 pairs N/A
January 15 Purchase 7 pairs $30 $210
January 20 Sale 10 pairs N/A
January 25 Purchase 4 pairs $30 $120

The cost of goods sold using the periodic average cost method is:

a) $358 b) $378 c) $265 d) $236

c) $265

Explanation:

                                  Quantity Price per pair                   Total

Beginning Inventory                 10 pairs $20                    $200

January 6 Purchase                 4 pairs $25                       $100

Total                                          14 pairs                         $300

January 10 Sale 5 pairs N/A

                                                      9 pairs                           $192.85

January 15 Purchase                   7 pairs $30                     $210

                                                  16 pairs                              $ 402.85

January 20 Sale 10 pairs N/A

                                                       6                                 $ 151

January 25 Purchase                   4 pairs $30                   $120

Total                                        10  pairs                                $271

Average Cost per unit = $ 630/ 25= $18

The cost of goods sold using the periodic average cost method is:

c) $265

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