Question

Perpetual Inventory Using Weighted Average Beginning inventory, purchases, and sales for WCS12 are as follows: Oct. 1 Inventory 300 units at $8 13 Sale 175 units 22 Purchase 375 units at $10 29 Sale 280 units a. Assuming a perpetual inventory system and using the weighted average cost method, determine the weighted average unit cost after the October 22 purchase. Round your answer to two decimal places. $ per unit b. Assuming a perpetual inventory system and using the weighted average method, determine the cost of goods sold on October 29. Round your "average unit cost" to two decimal places. $ c. Assuming a perpetual inventory system and using the weighted average method, determine the inventory on October 31. Round your "average unit cost" to two decimal places. $

Answer 1

Part a. Determine the weighted average unit cost after the October 22 purchase

$9.50

Part b. Determine the cost of goods sold on October 29

$ 2, 660

Part c. Determine the inventory on October 31.

$ 2,090

Step-by-step explanation:

The Weighted Average Method is an Inventory Management System that calculates a new cost per unit of inventory after each purchase on a weighted average.

Perpetual Inventory system records the cost of inventory after each sale of goods not after the period end (Periodic).

Part a. Determine the weighted average unit cost after the October 22 purchase

Weighted average unit cost =Total Cost / Total Units

= ((125 × $8) + (375 × $10))/(125+375)

= $9.50

Part b. Determine the cost of goods sold on October 29

Cost of goods sold = Units Sold × Cost Per Unit

= 280 units × $9.50

= $ 2, 660

Part c. Determine the inventory on October 31.

Inventory = Inventory Remaining × Cost Per Unit

= 220 × $9.50

= $ 2,090