Question

Perpetual Inventory Using Weighted Average Beginning inventory, purchases, and sales for WCS12 are as follows: Oct. 1 Inventory 340 units at $15 13 Sale 190 units 22 Purchase 350 units at $17 29 Sale 300 units a. Assuming a perpetual inventory system and using the weighted average method, determine the weighted average unit cost after the October 22 purchase Round your answer to two decimal places. per unit b. Assuming a perpetual inventory system and using the weighted average method, determine the cost of goods sold on October 29. Round your "average unit cost to two decimal places. C. Assuming a perpetual inventory system and using the weighted average method, determine the inventory on October 31. Round your "average unit cost" to two decimal places

Answer 1

Answer :

a) Weighted Average Unit Cost after the 22 October purchase = $16.40

Explanation :

Begining Inventory = 340 units @ $15/unit (Given)

Units Sold on 13 October = 190 units (Given)

Therefore, units in hand = 150 units (340 - 190) @ $15/unit

Units purchased on 22 October = 350 units @ $17/unit

Therefore, Total Cost of Goods Available for Sale after purchases on 22 October = (150 * $15) + (350 * $17)

= $2,250 + $5,950

= $8,200

Total Units in Hand after purchases on 22 October = 150 + 350

= 500 units

Weighted Average Cost per unit = Total Cost of Goods Available for Sale / Total Units in Hand

= $8,200 / 500

= $16.40 per unit

b) Cost of Goods Sold on October 29 = $4,920

Explanation :

Cost of Goods Sold on October 29 = Weighted Average Cost per unit * Number of Units Sold on October 29

Weighted Average Cost per unit = $16.40 (calculated in part a)

Number of Units Sold on October 29 = 300 units (Given)

Therefore, Cost of Goods Sold on October 29 = $16.40 * 300

= $4,920

c) Inventory on October 31 = $3,280

Explanation :

Ending Inventory on October 31 = Beginning Inventory - Units Sold on October 13 + Units Purchased on October 22 - Units Sold on October 29

= 340 - 190 + 350 - 300

= 200 units

Cost of Ending Inventory on October 31 = Ending Inventory on October 31 * Weighted Average Cost per unit

= 200 * $16.40

= $3,280

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Answer 2