White Oak Company uses the Weighted Average inventory method

White Oak Company uses the Weighted Average inventory method. The Company has the following inventory items and costs for the Period. Beginning inventory of 3 units purchased for $4,000 each. January 20, purchase 2 units for $4,200 each. February 3, purchase 3 units for $4,300 each. February 14, sold 5 units for $6,000 each How many units does the company have in inventory at the end of the quarter on March 31? What is the total cost of the units in inventory at March 31?$ What is the total Sales for the quarter ending March 31?$ What is the Cost of Goods Sold for the quarter ending March 31? $ What is Gross Margin for the quarter ending March 31?$

Solution

a) Ending inventory unit = 3+2+3-5 = 3 Units

b) Total units available for sale = 8 units

Total cost of goods available for sale = (3*4000+2*4200+3*4300) = 33300

Weighted average cost per unit = 33300/8 = 4162.50 per unit

Ending inventory cost = 4162.5*3 = $12487.50

c) Total Sales = 5*6000 = 30000

d) Cost of goods sold = 4162.50*5 = $20812.50

e) Gross margin = 30000-20812.50 = $9187.50