Walz Company had a beginning inventory of 400 units of Product Ribo at a cost of $8 per unit. During the year, purchases were:  Feb. 20 - 600 units at $9  May 5 - 500 units at $10  Aug. 12 - 300 units at $11  Dec. 8 - 200 units at $12 find COGS under average method

The average cost of goods arises from the sum of all the values of the goods purchased by a certain company, and its division by the amount of goods purchased. In this way, an average value per unit arises that reflects the average cost of each product.

Thus, the Walz Company had 400 units of Product Ribo at $8 per unit ($3,200 total), to which 600 units were added at $9 ($5,400 total), 500 units at $10 ($5,000 total), 300 units at $11 ($3,300 total), and 200 units at $12 ($2,400 total).

As we can see, the company had a total of 2,000 units with a total cost of $19,300. Therefore, the average cost per unit arises from the division of the total cost by the number of units, that is, 19,300 / 2,000 = 9.65. Therefore, the average cost per unit of Product Ribo is $9.65.

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