Question

In: Accounting

A company sells 1,200 units during the first quarter of the year at a selling price...

A company sells 1,200 units during the first quarter of the year at a selling price of $25 per unit.  In addition, the company has a beginning inventory of 600 units that were purchased at $10 per unit, and the following purchases and sales.

Date Units sold Units purchased Cost per unit

January 10         300    $11

January 25 450

February 7    400 $12

February 14 200

March 5 300 $14

March 27 550

If the company uses a periodic inventory system and the weighted average cost method of inventory valuation, then what is the company's ending inventory?

a.

$5,400
b.

$4,600
c.

$4,575
d.

$4,200
e.

$4,000

Solutions

Expert Solution

Answer: c.$ 4,575

Working:

Ending Inventory $           4,575 (1600-1200)*11.44
Average cost per unit
Units Rate Cost
600 $           10.00 $                     6,000
300 $           11.00 $                     3,300
400 $           12.00 $                     4,800
300 $           14.00 $                     4,200
1600 $                  18,300
$           11.44

ekkarill92 answered 2 years ago
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