Question

In: Accounting

A company uses the periodic inventory system and had the following activity during the current monthly...

A company uses the periodic inventory system and had the following activity during the current monthly period.

November 1: Beginning inventory 116 Units @ $10
November 5: Purchased 116 Units @ $26
November 8: Purchased 66 Units @ $25
November 16: Sold 190 Units @ $125
November 19: Purchased 95 Units @ $20


Using the weighted-average inventory method, the company's ending inventory would be:

a. $1,160

b. $3,991

c. $3,550

d. $4,710

e. $3,060

Solutions

Expert Solution

  • Correct Answer = Option ‘B’ $ 3,991
  • Working

Average Method

Cost of Goods available for sale

Units

Cost/unit

COG for sale

Beginning Inventory

116

$                10.00

$                        1,160.00

Purchases:

05-Nov

116

$                26.00

$                        3,016.00

08-Nov

66

$                25.00

$                        1,650.00

19-Nov

95

$                20.00

$                        1,900.00

TOTAL

393

$              19.659 or $ 19.66

$                        7,726.00

Ending Inventory = (393 units – 190 units) x $ 19.66
= $ 3991


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