Question

In June 2014, Datong Company sold a total of 13,000 units of product A at a price of $ 14 per unit. The following is the initial inventory and purchase of product A in June:

6/1 Initial inventory 5,000 units, unit cost: $5

6/5 Purchase 3,000 units, unit cost: $3

6/14 Purchase 8,000 units, unit cost: $3

6/24 Purchase 2,000 units, unit cost: $4

Trial work:

Ending inventory of Datong Company at the end of June by Weighted average method (Round to whole number)

Answer 1

Explanation:

1) Total Units Available:

= 5000 + 3000 + 8000+ 2000

= 18000 Units

2) Total Number of Units Sold:

=13000 ( Given)

3) Ending Inventory Units:

= Total Units Available - Unit Sold

= 18000 - 13000

= 5000 Ending Inventory

4) Cost goods sold available for sale:

6/1	(5000 ×$5)	$25000
6/5	( 3000 ×$3)	$9000
6/14	(8000 ×$3)	$24,000
6/24	(2000× $4)	$8000
Total COGS available For sale	18,000 Unit	$ 66,000

5) Average Cost per unit:

= Total COGS available ÷ Total Units

= $ 66,000 ÷ 18000

= $ 3.6667

6) Ending Inventor at end of june:

= Ending Units × Avg. cost per unit

= 5000 × $ 3.67 ( if we round it off upto two decimal)

= $ 18,350

Note:

No information is given regarding rounding of per unit cost, so i have rounded it off upto two decimal .