Question

You have the following information for Wildhorse Co. for the month ended October 31, 2017. Wildhorse Co. uses a periodic method for inventory. Date Description Units Unit Cost or Selling Price Oct. 1 Beginning inventory 58 $25 Oct. 9 Purchase 116 27 Oct. 11 Sale 104 37 Oct. 17 Purchase 98 28 Oct. 22 Sale 57 42 Oct. 25 Purchase 69 30 Oct. 29 Sale 104 42 Incorrect answer iconYour answer is incorrect. Calculate the weighted-average cost. (Round answer to 3 decimal places, e.g. 5.125.)

Answer 1

Answer:

The weighted-average cost by unit is $28,338.

Explanation:

AVCO Perpetual chart is attached.

AVCO Perpetual chart shows purchases , sales and balance of each period. Highlighted you will find the balance at the end of every purchase or sale.

When you have a purchase: Use the following formula to get the weighted-average cost by unit:

(P₁*Q₁)+(P₂*Q₂)/(Q₁+Q₂)

P₁ and Q₁ are the balance from operation that you made before.

P₂ and Q₂ is the data of the new operation (new purchase)

When you have a sale: you only discount the Quantity and use the average cost by unit to get the final inventory.  

The balance at the end of October is

Units Unit Cost Total

76         $28,338          $2.153,720 

Download xlsx