Question

A company had 260 units of inventory at a cost of $152 each on January 1. On June 5, the company purchased 460 units for $172 each. On November 10, the company purchased 160 units for $212 each. On December 15, the company sold 520 units. Given this information, determine the cost of the 520 units sold using the weighted average periodic inventory method. (Do not round your intermediate calculations; round the final answer to nearest dollar amount.

Answer 1

Answer:

$62,411

Explanation:

January 1:  260 units, cost of $152 each ($39,520 value)

June 5: purchased 460 units for $172 each ($79,120 value)

November 10: purchased 160 units for $212 each ($33,920 value)

December 15: the company sold 520 units.

Let's first find out the average weighted cost for the units purchased:

Total value: 39520 + 79120 + 33920 = $152,560

Total units bought: 260 + 460 + 160 = 880 units

Average cost: $152,560 / 880 units = $173,363636363636 /unit

Inventory left at the end:

I = 880 - 520 = 360 units

Value of the inventory:

V = 360 units * $173.3636363636 = $62,410.9090909

Rounded to the nearest dollar: $62,411