Question

Vaughn Company's inventory records show the following data: Units Unit Cost Inventory, January 1 11000 $8.80 Purchases: June 18 5000 8.00 November 8 4000 6.00 A physical inventory on December 31 shows 3500 units on hand. Vaughn sells the units for $14 each. The company has an effective tax rate of 18%. Vaughn uses the periodic inventory method. The weighted-average cost per unit is

Answer 1

Vaughn Company

The weighted-average cost per unit is

= $8.04

Step-by-step explanation:

a) Data and Calculations:

Units Unit Cost Total

Inventory, January 1 11,000 $8.80 $96,800

Purchases: June 18 5,000 8.00 40,000

November 8 4,000 6.00 24,000

Total 20,000 $160,800

The weighted-average cost per unit = $8.04 ($160,800/20,000)

b) The weighted average method of recording inventory adds up the total units and costs of beginning and current period purchased or manufactured inventory. The total costs are divided by the total units to obtain the weighted-average cost per unit.