Homework SourseHello can someone help me to solve this A company reports th
Hello, can someone help me to solve this?
A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 310 units. Ending inventory at January 31 totals 130 units.
Required:
Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method.
| Units | Unit Cost | |||
| Beginning inventory on January 1 | 280 | $ | 2.60 | |
| Purchase on January 9 | 60 | 2.80 | ||
| Purchase on January 25 | 100 | 2.94 | ||
Solution
Average cost per unit = [(280 * $2.60) + (60 * $2.80) + (100 * $2.94)] / 440 = $2.70
Costs assigned to ending inventory = 130 units * $2.70 = $351
