Question

The following information was available from the inventory records of Susan Company for January:

	Units	Unit Cost	Total Cost
Balance at January 1	3,000	$9.77	$29,310
Purchases:
January 6	2,000	10.30	20,600
January 26	2,700	10.71	28,917
Sales:
January 7	(2,500)
January 31	(4,200)
Balance at January 31	1,000

Assuming that Susan uses the periodic inventory system, what should the inventory be at January 31, using the weighted-average inventory method, rounded to the nearest dollar?

Answer 1

	Units	Unit Cost	Total Cost
Balance at January 1	3,000	$9.77	$29,310
Purchases:
Jan-06	2,000	10.3	20,600
Jan-26	2,700	10.71	28,917
Total	7,700		78,827

Number of units available for sale = 7,700

Cost of goods available for sale = $78,827

Weighted average cost per unit = Cost of goods available for sale/ Number of units available for sale

= 78,827/7,700

= $10.24

Ending inventory = 1,000 units

Cost of ending inventory = Ending inventory x Weighted average cost per unit

= 1,000 x 10.24

= $10,240

The inventory be at January 31 = $10,240