LiCo uses the periodic method and weightedaverage costing On

LiCo uses the periodic method and weighted-average costing. On December 31st, 20X7, LiCo\'s inventory consists of 1,800 units costing $5 each. In January, 20X8, LiCo purchases 4,000 units @ $9, of which it returns 700 units in March. It purchases 4,400 units in October @ $7, of which it returns 500 units in December. The weighted-average cost per unit of goods available for sale during 20X8 is.....?

Solution

Date

Particlurs

Units

Cost per unit

Total

31-Dec-07

Inventiry

1800

5

9000

Januray

Purchase

4000

9

36000

March

Return

-700

9

-6300

october

Purchse

4400

7

30800

December

Return

-500

7

-3500

31-Dec-08

Total

9000

66000

Weighted average cost

                 7.33

66000/9000