Question

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Las Lemus, Inc. for an operating period.

	Units	Unit Cost		Total Cost		Units Sold
Beginning Inventory	32	$36		$1,152
Sale No. 1						10
Purchase No. 1	28	40		1,120
Sale No. 2						32
Purchase No. 2	20	38		760
Totals	80			$3,032		42

Assuming Las Lemus, Inc. uses weighted-average (periodic) inventory procedures, the ending inventory cost is:

	A.	$1,444.00
	B.	$1,594.80
	C.	$1,442.00
	D.	$1,440.20

Answer 1

	Option D	$1440.20	is correct	answer
Explanation:
Calculation of Units of Ending Inventory
	Units available for sale
	Beginning Inventory				32
	Purchases
	Purchase No. 1			28
	Purchase No. 2			20	48
	Units available for sale				80
Less:	Units sold
	Sale No. 1			10
	Sale No. 2			32	42
	Units of Ending Inventory				38
Calculation of ending inventory under Weighted Average Cost - Periodic system:-
		Cost of Goods Available for Sale			Cost of Goods Sold - Average Cost			Ending inventory - Average Cost
		# of Units	Cost of Goods Available for Sale	Cost of Goods Available for Sale	# of Units sold	Average Cost per Unit	Cost of Goods Sold	# of Units in Ending inventory	Average Cost per Unit	Ending inventory
	Beginning Inventory	32	$   36.00	$ 1,152.00
	Purchases:
	Purchase No. 1	28	$   40.00	$ 1,120.00
	Purchase No. 2	20	$   38.00	$     760.00
	Total	80	$   37.90	$ 3,032.00	42	$   37.90	$ 1,591.80	38	$   37.90	1,440.20

	Weighted Average Cost per unit		=	$ 3,032.00
				80
			=	$       37.90

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