Question

The following information was available from the inventory records of Sunland Company for January: Units Unit Cost Total Cost Balance at January 1 9000 $9.70 $87300 Purchases: January 6 6000 10.35 62100 January 26 8300 10.73 89059 Sales January 7 (7400 ) January 31 (11300 ) Balance at January 31 4600 Assuming that Sunland does not maintain perpetual inventory records, what should be the inventory at January 31, using the weighted-average inventory method, rounded to the nearest dollar?

Answer 1

Answer:

Cost of Ending Inventory  $ 47,077.74

Units on Hand 31 Jan =  4,600

Weighted Average Cost= $ 10.24per unit

Explanation:

We divide the total cost with the total number of units  to get the weighted average cost per unit.

Sunland Company

                                       Units      Unit Cost       Total Cost      

Balance at January 1       9000          $9.70            $87300

Purchases: January 6      6000          10.35              62100

January 26                       8300           10.73               89059

Total Units                       23,300                               238,459

Sales January 7               (7400 )

January 31                        (11300 )

Units on Hand 31 Jan =  4,600

Weighted Average Cost= Total Cost/ Total Units = 238,459/ 23,300 =

$ 10.235≅ $ 10.24

Cost of Ending Inventory = 4,600*$ 10.24= $ 47,077.74