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On January 1, 2016 Oxford Company had 3,500 units in inventory at a cost of $9...

On January 1, 2016 Oxford Company had 3,500 units in inventory at a cost of $9 per unit.  During 2016 Oxford company purchased 3,000 units (Lot #1 - the first units purchased during the year) at a cost of $9.50 per unit, 4,000 units (Lot #2) at a cost of $10.50 per unit and 2,500 units (Lot #3) at a cost of $10 per unit.  The company sold 8,700 units during 2016 at a sales price of $12.25 per unit.  If Oxford Company uses a periodic inventory system and the weighted average cost method, then what is the company's ending inventory for December 31, 2016?

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Answer #1
Units Unit cost Total cost
Beginning inventory 3500 9 31500
Purchase (Lot #1) 3000 9.50 28500
Purchase (Lot #2) 4000 10.50 42000
Purchase (Lot #3) 2500 10 25000
Total goods avaliable 13000 127000
Weighted average cost per unit = Total cost of goods available / Total units available = 127000 / 13000 = 9.7692
Ending inventory units = Total units available - Sales unit = 13000 - 8700 = 4300
Cost of ending inventory = Ending inventory units * Weighted average cost per unit = 4300 * 9.7692 = 42008
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