Question

Glasgow Enterprises started the period with 85 units in beginning inventory that cost $2.60 each. During the period, the company purchased inventory items as follows. Glasgow sold 315 units after purchase 3 for $2.60 each. Purchase No. of Items Cost 1 290 $ 3.10 2 195 $ 3.20 3 50 $ 3.60 Glasgow's ending inventory under weighted average would be approximately: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

$945.50

Explanation:

The computation of the weighted average is shown below:

Ending inventory = opening inventory + Purchase - Sales

= 85 + (290 + 195 + 50) -  315

= 620 - 315

= 305

Average cost per unit = (Beginning inventory units × price per unit + purchase inventory units × price per unit + purchase inventory units × price per unit ) ÷ (Beginning inventory units + purchase inventory units + purchase inventory units)

= (85 × $2.60 + 290 × $3.10 + 195 × $3.20 + 50 × $3.60) ÷ (85 + 290 + 195 + 50)

= ($221 + 899 + $624 + $180 ) ÷ (620)

= $1924 ÷ 620

= $3.1

Weighted average = Ending inventory × Average cost per unit

= 305 × $3.1

= $945.50