Question

Niles Co. has the following data related to an item of inventory: Inventory, March 1 110 units @ $1.10 Purchase, March 7 210 units @ $2.10 Purchase, March 16 110 units @ $2.70 Inventory, March 31 160 units The value assigned to ending inventory if Niles uses "weighted average" is_______________.

Answer 1

The value assigned to ending inventory if Niles uses "weighted average" is $320 ( to 160 units @ $2 )

Explanation: Number of units Price per unit Total

Purchases on March 1 = 110 $1.10 $1,21

Purchases March 7 = 210 $2.10 $441

Purchases March 16 = 110 $2.70 $297

Inventory on March 31 = 160 $2.00 $320

Weighted Average Inventory value = Accumulated Value / Total Number of units

Weighted Average Inventory value = ( 121 + 441 + 297 ) / ( 110 + 210 + 110 )

Weighted Average Inventory value = 1.997674419 = $2.00