Question

Inventory item 101 purchased in October costs $100. Inventory item 102 purchased in November costs $110. The two inventory items are identical in all respects, except the price paid to acquire them. The business used the Weighted Average (WA) cost flow method. If item 101 is sold to a customer, the amount assigned to cost of goods sold is...

Answer 1

To calculate the amount assigned to cost of goods sold using the Weighted Average (WA) cost flow method, you need to consider the cost and quantity of each inventory item.

Step-by-step explanation:

The Weighted Average (WA) cost flow method assigns the cost of goods sold based on the weighted average cost of the inventory items. To calculate the weighted average cost, you need to consider the cost and quantity of each inventory item.

In this case, there are two inventory items: item 101 purchased in October for $100, and item 102 purchased in November for $110. To calculate the weighted average cost, you add up the total cost of both items and divide it by the total quantity of both items.

If item 101 is sold to a customer, the amount assigned to cost of goods sold would be calculated by multiplying the quantity of item 101 sold by the weighted average cost.