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frutty [35]
3 years ago
6

Monarch Company uses a weighted-average perpetual inventory system, and has the following purchases and sales: January 1, 20 uni

ts were purchased at $10 per unit. January 12, 12 units were sold. January 20, 18 units were purchased at $11 per unit. What is the value of ending inventory?
A. 272.
B. 126.
C. 398.
D. 120.
Business
2 answers:
Phoenix [80]3 years ago
4 0

Answer:

<u> $272</u>

Explanation:

Monarch Company uses a weighted-average perpetual inventory system, and has the following purchases and sales:

January 1, 20 units were purchased at $10 per unit.

January 12, 12 units were sold.

January 20, 18 units were purchased at $11 per unit.

<u>Weighted-average perpetual inventory system, divides the cost of goods available for sale by the number of units available for sale, which yields the weighted-average cost per unit. </u>

<u>We then use this weighted-average figure to assign a cost to both ending inventory and the cost of goods sold.</u>

<u />

Therefore Goods Available for Sale = 20 units + 18 units = 38 units

Cost of Goods Available for Sale = ($10 x 20 units) + ($11 x 18 units) = $200 + $198 = $398

<u>weighted-average cost per unit = $398/ 38 units = $10.47 per unit</u>

<u>Therefore the value of ending inventory = (20 -12 +18) x $10.47 = $272</u>

Setler [38]3 years ago
4 0

Answer:

The answer to this question is A. 272

Explanation:

The total goods available for sale    = 38 units (20 units + 18 units)

Cost of Goods Available for Sale = $398 (i.e ($10 x 20 units) + ($11 x 18 units) = $200 + $198 )

weighted-average cost per unit is therefore  = $398/ 38 units = $10.47 per unit

Value of ending inventory  = (20 -12 +18) x $10.47 = $272

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