Question

Check My Work eBook Exercise 2-9 Welghted Average Costing Using the weighted average method of perpetual inventory costing and the following information: July 1 Balance on hand, 1,000 yd of linen @ $4.00 each. 3 Issued 250 yd. 5 Received 500 yd @ $4.50 each. 6 Issued 150 yd. 10 Issued 110 yd. 11 Factory returned 10 yd, which were issued on the 10th, to the storeroom. 15 Received 500 yd @ $5.00 each. 20 Returned 300 yd to the vendor from the July 15 purchase. 26 issued 600 yd. Compute the cost of materials used and the cost of the July 31 inventory. (Round unit prices to four decimal places and totals to the nearest whole dollar.) Cost of materials used Cost of the July 31 inventory 9 M Nf

Answer 1

Under weighted average inventory method, total value of purchases shall be divided by total number of units purchased to calculate unit cost. Cost of goods sold shall be calculated by multiplying number of units sold by unit cost calculated just before the date of sale perpetully. Purchases or Returns Yards Rate Amount 500 $4.5000 $2,250 Jul. 1 Jul. 3 Jul. 5 Jul. 6 Jul. 10 Jul. 11 Jul. 15 Jul. 20 Jul. 26 Cost of Materials used Ending Inventory Yards Rate Amount Yards Rate Amount 1,000 $4.0000 $4,000 250 $4.0000 $1,000 750 $4.0000 $3,000 [Rate = $3000 / 750 = $4] 1,250 $4.2000 $5,250 [Rate = $5250 / 1250 = $4.2] 150 $4.2000 $630 1,100 $4.2000 $4,620 [Rate = $4620 / 1100 = $4.2] 110 $4.2000 $462 990 $4.2000 $4,158 [Rate = $4158 / 990 = $4.2] (10) $4.2000 ($42) 1,000 $4.2000 $4,200 [Rate = $4200 / 1000 = $4.2] 1,500 $4.4667 $6,700 [Rate = $6700 / 1500 = $4.4667] 1,200 $4.3333 $5,200 [Rate = $5200 / 1200 = $4.3333] 600 $4.3333 $2,600 600 $4.3334 $2,600 [Rate = $2600 / 600 = $4.3334] 1,100 $4,650 600 $4.3334 $2,600 (Total Cost of Materials Used) (Ending Inventory) 500 (300) $5.0000 $5.0000 $2,500 ($1,500)