Question

Niles Co. has the following data related to an item of inventory: Inventory, March 1 110 units @ $1.10 Purchase, March 7 210 units @ $2.10 Purchase, March 16 110 units @ $2.70 Inventory, March 31 160 units The value assigned to ending inventory if Niles uses "weighted average" is_______________.

Answer 1

Answer:

The value assigned to ending inventory if Niles uses "weighted average" is $320 ( to 160 units @ $2 )

Explanation:                  Number of units    Price per unit    Total

Purchases on March 1 =         110                     $1.10               $1,21

Purchases March 7      =         210                    $2.10              $441

Purchases March 16    =         110                     $2.70              $297  

Inventory on March 31 =        160                    $2.00             $320

Weighted Average Inventory value = Accumulated Value / Total Number of units

Weighted Average Inventory value = ( 121 + 441 + 297 ) / ( 110 + 210 + 110 )

Weighted Average Inventory value = 1.997674419 = $2.00