Question

Alpha Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2016: (Round all per unit calculations to the nearest penny.)

Date    Activity    Quantity    Unit Price

May 1 Beginning Inventory 100 $10.10

May 5    Purchase 200    $11.00

May 15    Purchase    300 $13.00

May 25    Purchase 150 $15.00

Sales were 500 units Ending units $250. Using weighted-average method, determine the dollar values following for the month of May: (Enter only whole dollar values.)

Answer 1

Answer:

Particulars	Quantity	Actual Cost (in $)	Actual Total Cost (in $)
Beginning Inventory on 1st may	100	10.10	1,010
Add: Purchase on 5th May	200	11.00	2,200
Add: Purchase on 15th May	300	13.00	3,900
Add: Purchase on 25th May	150	15.00	2,250
Less: Sales	500	--	--
Ending Inventory	250

The actual cost of all purchased or beginning inventory units in the month of May is $9,360 ($1,010+$2,200+$3,900+$2,250).

The total of all purchased or beginning inventory units is 750 (100+200+300+150).

Therefore, the weighted Average cost per unit is $12.48 ($9,360/750)

The ending inventory valuation is $3,120 (250 units * 12.48).

While the cost of goods sold valuation is $6,240 (500 units × $12.48 weighted average cost). The sum of these two amounts equals the $9,360 i.e. total actual cost of all purchases and beginning inventory.