Question

Culver Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Culver Company uses the periodic inventory system. Purchases Sales Units Unit Cost Units Selling Price/Unit 3/1 Beginning inventory 90 $40 $40 3/3 Purchase $50 3/4 Sales 53 $90 3/10 Purchase $55 $55 3/16 Sales $100 3/19 Sales $100 $100 3/25 Sales 3/30 Purchase 37 $60

Answer 1

Calculation of ending inventory under Weighted Average Cost - Periodic system:-
	Average Cost per unit			=	Total Cost of Goods available for sale
					Total quantity
	Periodic -Weighted Average Cost	Cost of Goods Available for Sale			Cost of Goods Sold - Average Cost			Ending inventory - Average Cost
		# of Units	Cost per Unit	Cost of Goods Available for Sale	# of Units sold	Average Cost per Unit	Cost of Goods Sold	# of Units in Ending inventory	Average Cost per Unit	Ending inventory
	Beginning Inventory	90	$                    40	$             3,600
	Purchases:
	3/3	53	$                    50	$             2,650
	3/10	180	$                    55	$             9,900
	3/30	37	$                    60	$             2,220
	Total	360	$                    51	$           18,370	249	$                    51	$        12,699	111	$                51	5,661
	Average Cost per unit			=	$18,370
					360
				=	$51.0
	Total No. of units sold	=	53+61+82+53		249
	Units in ending inventory	=	360-249	=	111
	Amount assigned to ending inventory	=	111 * 51	=	$             5,661

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