Final answer:
To find the ending inventory of Commodity Z using the weighted average cost method, we calculate the average cost per unit and multiply it by the remaining units, resulting in an ending inventory balance of $1134.50.
Step-by-step explanation:
To calculate the ending inventory balance of Commodity Z using the weighted average cost method, we first need to determine the total cost of all units available for sale and then divide this by the total number of units to find the average cost per unit. Afterward, we multiply the average cost per unit by the number of units in ending inventory to find the value of the ending inventory.
Here's the computation:
- Beginning inventory: 11 units at $51 each
- First purchase: 19 units at $52 each
- Second purchase: 28 units at $28 each
- Third purchase: 18 units at $62 each
Total units available for sale = 11 + 19 + 28 + 18 = 76 units
Total cost of units = (11*$51) + (19*$52) + (28*$28) + (18*$62) = $561 + $988 + $784 + $1116 = $3449
Average cost per unit = Total cost / Total units = $3449 / 76 = $45.38 (rounded to two decimal places)
Ending inventory at average cost = 25 units * $45.38 = $1134.50
The ending inventory balance of Commodity Z, using the weighted average cost method, is $1134.50.