Question

The following data applies to a particular item of merchandise: On hand at start of period 300 $5.10 1st purchase 500 5.20 2nd purchase 700 5.30 3rd purchase 600 5.50 Number of units available for sale 2,100 On hand at end of period 500 Number of units sold during period 1,600 Of the 1,600 units sold during the period, 300 were from the beginning inventory; 500 from the first purchase; 600 from the second purchase; and 200 from the last purchase. Using the weighted-average costing method and rounding the average unit cost to the nearest whole cent, the value of the inventory on hand at the end of the period would be

Answer 1

The value of the inventory on hand at the end of the period, calculated using the weighted-average costing method, is $2,650.

Step-by-step explanation:

The question asks for the calculation of the value of inventory on hand at the end of a period using the weighted-average costing method. To find this, we first calculate the total cost of all purchases and the beginning inventory, then divide by the total units available for sale, and after that, apply the calculated average cost to the units on hand at the end of the period.

The total cost of goods available for sale is:

• 300 units at $5.10 each = $1,530
• 500 units at $5.20 each = $2,600
• 700 units at $5.30 each = $3,710
• 600 units at $5.50 each = $3,300

Total cost of goods available = $1,530 + $2,600 + $3,710 + $3,300 = $11,140

Total units available for sale = 300 + 500 + 700 + 600 = 2,100 units

The weighted-average cost per unit is $11,140 / 2,100 units = $5.30 per unit.

Now we calculate the value of the 500 units on hand at the end of the period using the weighted-average cost: 500 units x $5.30 = $2,650.

The value of the inventory on hand at the end of the period is $2,650.

Answer 2

$2,650

Step-by-step explanation:

beginning inventory 300 units at $5.10 = $1,530

1st purchase 500 units at $5.20 = $2,600

2nd purchase 700 units at $5.30 = $3,710

3rd purchase 600 units at $5.50 = $3,300

total number of units 2,100

total cost = $11,140

average cost per unit = $5.30

ending inventory = 500

value of ending inventory using average cost = 500 x $5.30 = $2,650