solve the following exercise oBI3 Beginning inventory purcha

solve the following exercise

oBI.3 Beginning inventory, purchases, and sales for 30xT are as follows May 1 12 Inventory Sale Purchase Sale 50 units at $80 35 units 60 units at 590 55 units 26 method, deter inventory system and using the weighted mine (a) the weighted average unit cost after the May 23 purchase, (b) the cost of the merchandise sold on May 26, and (c) the inventory on May 31.

Solution

Solution:

a. Weighted average unit cost after the May 23 purchase: $88

b. Cost of the merchandise sold on May 26: $4840

c. Inventory on May 31: $1760.

Working:

Date

No of units

Cost per unit

Total purchase

Sales

No of units

Cost per unit

Balance

Mar-01

50

80

4000

Mar-12

35

15

80

1200

May-23

60

90

5400

15

80

1200

60

90

5400

75

88

6600

Mar-26

20

88

1760

a. Weighted average unit cost after the May 23 purchase = (1200 + 5400) / 75 = $88

b. Cost of the merchandise sold on May 26 = $88 * 55 = $4840

c. Inventory on May 31 = $88 * 20= $1760.

Date	No of units	Cost per unit	Total purchase	Sales	No of units	Cost per unit	Balance
Mar-01					50	80	4000
Mar-12				35	15	80	1200
May-23	60	90	5400		15	80	1200
					60	90	5400
					75	88	6600
Mar-26					20	88	1760