if in problem 1.3 the cogm per unit is 216,
why is not cogs 216xthe units sold(4000)?
thanks for the help
Hello Lourenço,
The fact that the company uses WAC also applies to the movements in finished goods, not only to the movements in raw materials.
Therefore, the COGM/unit of 216€ only refers to the 5 000 units from production. In addition, you need to consider that there are opening stocks of finished goods of 1 000 units at 200€/unit. So, you also need to calculate the WAC for finished goods, which will be around 213.33. Then, you can multiply that value for the 4 000 units sold.
Hope this helps
The fact that the company uses WAC also applies to the movements in finished goods, not only to the movements in raw materials.
Therefore, the COGM/unit of 216€ only refers to the 5 000 units from production. In addition, you need to consider that there are opening stocks of finished goods of 1 000 units at 200€/unit. So, you also need to calculate the WAC for finished goods, which will be around 213.33. Then, you can multiply that value for the 4 000 units sold.
Hope this helps