Question

Inventory Costing Methods and the Perpetual Method
McKay & Company experienced the following events in March:

Date	Event	Units		Unit Cost	Total Cost
Mar. 1	Purchased inventory	100	@	$33	$3,300
Mar. 3	Sold inventory	60
Mar. 15	Purchased inventory	100	@	$36	$3,600
Mar. 20	Sold inventory	40

Assume the perpetual inventory system is used. Use the weighted-average inventory costing method to calculate the company’s cost of goods sold and ending inventory as of March 31.

Round weighted-average cost per unit to two decimal places. Use rounded answer for subsequent calculations. Round all other answers to the nearest dollar.

March 3
Cost of goods sold
March 20
Weighted-average cost per unit
Cost of goods sold
March 31
Total cost of goods sold
Ending inventory

Answer 1

	Average Cost per unit			=	Total Cost
					Quantity
Schedule of Cost of Goods Sold
Weighted Average Cost - Perpetual Method
	Purchases			Cost of Goods Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Total Cost	Average Cost per unit
Mar 1	100	$   33.00	$    3,300				100	$    3,300	$   33.00
Mar 3				60	$       33.00	$      1,980	40	$    1,320	$   33.00
Mar 15	100	$   36.00	$    3,600				140	$    4,920	$   35.14
Mar 20				40	$       35.14	$      1,406	100	$    3,514	$   35.14
	Balances			100		$      3,386	100	$ 3,514	$   35.14
	Mar 3
	Cost of goods sold		$ 1,980
	Mar 20
	Weighted-average cost per unit		$ 35.14
	Cost of goods sold		$ 1,406
	Mar 31
	Total cost of goods sold		$ 3,386
	Ending inventory		$ 3,514

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