Question

Jan. 1= 380 units at $15.00, May 1= 270 units at $20.00, June 1= 300 units at $24.00, Oct. 1= 250 units at $30.00. There was no beginning inventory, but ending inventory consisted of 400 units. If Rudd uses the weighted-average cost method and the periodic inventory system, what would be the cost of the ending inventory?

a) $9,600
b) $12,000
c) $11,520
d) $14,400

Answer 1

The cost of the ending inventory using the weighted-average cost method and periodic inventory system is $7,425.

Step-by-step explanation:

The weighted-average cost method is used to calculate the cost of ending inventory in the periodic inventory system. This method takes into account both the quantity and cost of the units sold throughout the year. To calculate the cost of ending inventory, you need to multiply the total units available for sale by the weighted-average cost per unit.

In this case, the total units available for sale are the sum of the units purchased throughout the year plus the ending inventory, which is 380 + 270 + 300 + 250 + 400 = 1600 units. The weighted-average cost per unit is calculated by dividing the total cost of goods available for sale by the total units available for sale. In this case, it would be (380 * 15 + 270 * 20 + 300 * 24 + 250 * 30) / 1600 = $18.5625. Finally, you can calculate the cost of the ending inventory by multiplying the ending inventory units by the weighted-average cost per unit, which is 400 * $18.5625 = $7,425.