This preview shows page 1. Sign up to view the full content.
Unformatted text preview: average cost per unit in 1987 comes out to be 132.46 For 1988 Opening Inventory = 43000 x 4 x 132.26 = $ 22749 (in thousand) Production Cost = 43000 x 132.26 + 20000 x 139.3 = $ 8473 (in thousand) Weighted Average cost = ( 22749+8473 ) / 235000 ( 235000 are the total no of units) = $ 132.86 Closing inventory in 1988 = 192000 x 132.86 = $ 25509 (in thousand) Cost of goods sold = 8473 + 22749 25509 = $ 5713 Add bottling costs = $ 458 Total COGs = 6171 This shows that there is no difference in taking the entire production of 63000 in 1988 and calculating the CoGs and income statement or one can take only the extra production & costs and reach the same figures....
View
Full
Document
 Spring '11
 hbr

Click to edit the document details