Question

Skysong, Inc. reports the following for the month of June. Units Unit Cost Total Cost June 1 Inventory 250 $5 $ 1,250 12 Purchase 500 9 4,500 23 Purchase 375 11 4,125 30 Inventory 125 Calculate Weighted Average Unit Cost

Answer 1

Weighted average unit cost = $8.78

Step-by-step explanation:

The weighted average method of inventory determines the average cost per unit of inventory each time a new batch is received. or every new batch received the average cost per unit is re-computed by dividing the total value of stock by the outstanding number of units.

The explanation is completed using calculation below:

Total value of stock = (250× $5) + (500×$9) + (375 × 11) = $9,875

Total units of stock = 250 + 500 + 375 = 1,125 units

Weighted average unit cost = Total value of stock / total units of stock

= $9875 / 1125 units = $8.78

Weighted average unit cost = $8.78