Question

The following units of an inventory item were available for sale during the year: Beginning inventory 10 units at $55 First purchase 25 units at $60 Second purchase 30 units at $65 Third purchase 15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The value of ending inventory rounded to the nearest dollar using the weighted average cost method is

Answer 1

$3,788

Step-by-step explanation:

Periodic Inventory is being used. Periodic inventory method determines the cost of sales and inventory after a certain period determined by the company.

Step 1 : Find Cost per unit

Cost per unit = Total Costs ÷ Units available for sale

= $5,050 ÷ 80

= $63.125

Step 2 : Determine value of ending inventory

Value of ending inventory = Cost per unit x units remaining

= $63.125 x 60 units

= $3,788