Question

Numeric Company uses the periodic inventory method and had no beginning inventory. The company purchased 7 units of inventory at $8 per unit during January, 5 units of inventory at $10 per unit during February, and 6 units of inventory at $11.00 per unit during June. The company sold 6 units of inventory during October. There were no additional purchases or sales during the remainder of the year. If Numeric Company uses the weighted average method, what is the cost of its ending inventory?

Answer 1

Answer:

$115

Explanation:

The computation of the cost of the ending inventory is shown below:

Total units purchased

= 7 units + 5 units + 6 units

= 18 units

And, the total cost is

= 7 units × $8 + 5 units × $10 per unit + 6 units × $11 per unit

= $56 + $50 + $66

= $172

And, the closing units inventory units is

= 18 units - 6 units

= 12 units

So, the cost of ending inventory is

= $172 × 12 units ÷ 18 units

= $115