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Given the following data, what is the weighted-average cost of ending inventory rounded to the nearest...

Given the following data, what is the weighted-average cost of ending inventory rounded to the nearest whole dollar? (Do not round in the process of your calculations, only round your final answer.)

Sales revenue 100 units at $15 per unit

Beginning inventory 40 units at $9 per unit

Purchases 80 units at $10 per unit

Solutions

Expert Solution

Weighted Average cost of ending inventory (20) units is $ 193.

Explanation :-

While using the weighted average cost method, we divide the cost of goods available for sale by the number of units available for sale, which yields the weighted-average cost per unit. In this calculation, the cost of goods available for sale is the sum of beginning inventory and net purchases. This weighted average figure is then used to assign a cost to both ending inventory and the COGS.

Calculation :-

Weighted Average Cost = Cost of goods available for sale / number of units available for sale

where,

Cost of goods available for sale = Value of beginning inventory + Value of net purchase

= (40 units * $9 per unit) + (80 units * $ 10 per unit)

= 360 + 800

=1160

Number of units available for sale = Units of beginning inventory + No. of units purchased

= 40 units + 80 units

= 120 units

Weighted Average Cost = 1160/120

= 9.66667

Value of Cost of Goods Sold = Units sold * Weighted average cost

= 100 units * 9.66667

= 966.667

Value of ending inventory = Closing inventory * Weighted average cost

= (120-100) units * 9.66667

= 20 units * 9.66667

= 193.33 or 193

ekkarill92 answered 1 year ago
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