Homework SourseThe following data is available for one of the products sold
The following data is available for one of the products sold by Learning Tree, Inc., which uses the perpetual inventory system:
If the moving average method is used, what is the amount assigned to the ending inventory on May 30?
$
| May 1 | On hand, 1,000 units at $2.00 each | $2,000 | ||
| 5 | Purchased 2,000 units at $2.75 each | 5,500 | ||
| 10 | Sold 2,500 units at $16 each | |||
| 18 | Purchased 2,000 units at $4.00 each | 8,000 | ||
| 24 | Sold 1,500 units at $12 each | |||
| 31 | On hand, 1,000 units |
Solution
On may 10, average cost of 3000 units available for sale = 7500/3000 = 2.5
After sale of 2,500 units 500 units will remain at a total cost of = 500 * 2.5 = 1,250
On may 18 2,000 units were purchased, raised total cost of goods available for sale to = 9,250
Average cost per unit = 9,250/2500 = 3.7
Cost of ending 1000 units = 1000 * 3.7 = 3,700
