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jek_recluse [69]
3 years ago
5

Jameson Company uses average cost and a perpetual system. On January 1, the company had 600 units of inventory at an average cos

t of $55 per unit for a total cost of $33,000. The company purchased and sold inventory during the month as follows: Purchases: January 10: 1,000 units at $59 = $59,000 January 20: 800 units at $62 = $49,600 Sales: January 12: 1,200 units January 28: 900 units What is the average cost per unit that should be used to determine the cost of the units sold on January 28?
Business
2 answers:
yulyashka [42]3 years ago
8 0

Answer: AVERAGE COST = $60.50

Explanation:

January 1:

Inventory unit = 600

Cost per unit = $55

Total cost = $33,000

January 10:

Purchased inventory unit = 1000

Cost per unit = $59

Total = $59,000

January 12:

Unit sold = 1200

January 20:

Purchased inventory unit = 800

Cost per unit = $62

Total = $49,600

Average cost of inventory prior to January 12 sales :

[Cost(January 1) + Cost(January 10)] ÷ unit (January 1) + unit(January 10)

= $(33,000 + 59,000) ÷ (600 +1000)

= $92,000 ÷ 1600 = $57.50

Sales made on January 12: 1200 units

Total units left in inventory :

1600 - 1200 = 400 units

Average cost of inventory after January 20 inventory purchase:

(Unit × cost per unit) ÷ total unit

Average cost =[ (400 × $57.50) + (800 × $62)] ÷ (400 + 800)

Average cost = ($23,000 + $49,600) ÷ 1200

Average cost = $(72,600 ÷ 1200) =

$60.50

Leni [432]3 years ago
3 0

Answer:

the average cost per unit that should be used to determine the cost of the units sold on January 28 is $ 59.00

Explanation:

The Weighted Average Cost Method calculates the new cost of Inventory with each purchase of Inventory.

The Perpetual Inventory System records the cost of inventory sold with each sale made.

<u>Calculation of  the new cost of Inventory with each purchase of Inventory :</u>

January 10:

Cost per Unit = Total Cost / Total Number of Units

Cost per Unit = (( 600 units × $55 per unit ) + ( 1000 units × $59 per unit )) / 1600 units

                      = $ 57.50

January 20:

Cost per Unit = Total Cost / Total Number of Units

Cost per Unit = (( 1600 units × $57.50 per unit ) + ( 800 units × $62 per unit )) / 2400 units

                      = $ 59.00

There were no further purchases from this point

Thus cost per units remains at $ 59.00

Therefore the average cost per unit that should be used to determine the cost of the units sold on January 28 is $ 59.00

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