A company just began business and made the following four inventory purchases in June: June 1 177 units $1062 June 10 236 units 1888 June 15 236 units 2360 June 28 177 units 2124 $7434 A physical count of merchandise inventory on June 30 reveals that there are 236 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30 is $2832. $2124. $1416. $1888.
The data is
Date of Purchase Units Total Cost Incurred
June 1 177 $1,062
June 10 236 $1,888
June 15 236 $2,360
June 28 177 $2,124 826 $7,434
Weighted Average Price = Total cost incurred /Total Units
= $7,434 / 826 units
Weighted Average Price = $9 per unit
Since, total cost of each purchase is given, we have taken the sum of them in the numerator . Orelse, we would have taken sum of weighted average of unit cost and no. of units which would ultimately lead to the same answer.
Given ending inventory on June 30 = 236 units
Therefore value of ending inventory as per weighted average cost method = 236 * $9 = $2,124
Therefore, the answer is $2,124
Get Answers For Free
Most questions answered within 1 hours.