Question

Question 2 View Policies Current Attempt in Progress Marin Inc. uses a perpetual inventory system reports the following for the month of June. PLUS Date Explanation Units Unit Cost Total Cost June 1 Inventory $520 brary 130 390 12 Purchases 5 1,950 lum Purchases 1,320 30 Inventory Calculate the average cost per unit, using a perpetual inventory system. Assume a sale of 450 units occurred on June 15 for a selling price of $7 and a sale of 55 units on June 27 for $8. (Round answers to 3 decimal places, . 5.125.) June 15

Answer 1

Average cost per Unit under Perpetual inventory System Here, Perpetual inventory system weighted average cost of unit to be calculate for entire class of inventory. Formula for Weighted average cost per unit - Total of value of Inventory / Total units Then this average rate used to calculate value of sale, it will be multiplied with number of units sold In this system, we need to calculate weighted average cost per unit just before each sale transaction Purchase Sale Balance Date Transaction Units Unit Cost Total Value Units Unit Cost Total Value Units Unit Cost Total Value June 1 Opening Inventory 130 $ 4.00 $ 520.00 0 $ - $ - 130 $ 4.00 $ 520.00 June 12 Add:Purchase 390 $ 5.00 $ 1,950.00 0 $ - $ - 390 $ 5.00 $ 1,950.00 130 $ 4.00 $ 520.00 (Note 1) Total of Balance 520 "$ 2,470.00 Less Sale of 450 units (using June 15 average rate) 0 $ - $ -450 $ 4.75 $-2,137.50 -450 $ 4.75 $-2,137.50 Total of Balance 70 $ 4.75 $ 332.50 June 23 Add:Purchase 220 $ 6.00 1,320.00 0 $ - $ 220 $ 6.00 $ 1,320.00 70 $ 4.75 $ 332.50 (Note 2) Total of Balance 290 $1,652.50 Less Sale of 55 units (using June 27 average rate) -55 $ 5.70 $ -313.41 -55 $ 5.70 $ -313.41 Total Closing Value of Inventory (Closing inventory units * average rate) 235 $ 5.70 $ 1,339.09

Note 1 Weighted average cost per unit under perpetual inventory system Total of value of Inventory $2,470.00 Total of units 520 Average cost /unit (a/b) $ 4.75 This rate will take for sale of material Note 2 Weighted average Cost per unit under perpetual inventory system Total of value of Inventory $1,652.50 Total of units 290 Average cost /unit (a/b) $ 5.70 This rate will take for sale of material