Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

Under the periodic inventory system, which formula is used to compute the average manufacturing cost per drum set when using the weighted-average method?

Total manufacturing costs divided by units sold

Cost of goods sold divided by ending inventory

Ending inventory divided by total cost of goods purchased

Total cost of goods available for sale divided by total units available for sale

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Verified step by step guidance

Understand the periodic inventory system: Under this system, inventory updates are made at the end of the accounting period rather than continuously. The weighted-average method is used to calculate an average cost for inventory items.

Identify the formula for the weighted-average method: The average manufacturing cost per unit is calculated by dividing the total cost of goods available for sale by the total units available for sale.

Break down the components of the formula: 'Total cost of goods available for sale' includes the beginning inventory cost plus the cost of goods purchased during the period. 'Total units available for sale' includes the beginning inventory units plus the units purchased during the period.

Apply the formula conceptually: To compute the average manufacturing cost per drum set, sum up the total manufacturing costs (beginning inventory cost + cost of goods purchased) and divide this by the total number of drum sets available for sale (beginning inventory units + units purchased).

Ensure clarity in application: This formula provides a weighted average cost per unit, which is then used to value ending inventory and calculate the cost of goods sold under the periodic inventory system.