Perpetual inventory using weighted average

Question

Beginning inventory, purchases, and sales for WCS12 are as follows:

Date Line Item Description Value
Oct. 1 Inventory 310 units at $11
Oct. 13 Sale 190 units
Oct. 22 Purchase 380 units at $12
Oct. 29 Sale 300 units
a. Assuming a perpetual inventory system and using the weighted average method, determine the weighted average unit cost after the October 22 purchase. Round your answer to two decimal places.
fill in the blank 1 of 1$

per unit

b. Assuming a perpetual inventory system and using the weighted average method, determine the cost of goods sold on October 29. Round your "average unit cost" to two decimal places.
fill in the blank 1 of 1$

c. Assuming a perpetual inventory system and using the weighted average method, determine the inventory on October 31. Round your "average unit cost" to two decimal places.
fill in the blank 1 of 1$

Answer 1

To determine the weighted average unit cost, cost of goods sold, and ending inventory under a perpetual inventory system using the weighted average method, we will go through the transactions step by step.

a. Determine the weighted average unit cost after the October 22 purchase.

Step 1: Calculate the cost of the beginning inventory:

• Beginning Inventory: 310 units at $11
  • Cost of Beginning Inventory = 310 * 11 = $3,410

Step 2: Calculate the cost of purchases before the sales:

• Purchase on October 22: 380 units at $12
  • Cost of Purchases = 380 * 12 = $4,560

Step 3: Calculate total units and total costs before the October 22 purchase:

• Total Units before October 22 purchase:
  • Beginning Inventory = 310 units
  • = 310 units
• Total Cost before October 22 purchase:
  • Cost of Beginning Inventory = $3,410

After the October 22 purchase:

• Total Units = 310 + 380 = 690 units
• Total Cost = $3,410 + $4,560 = $7,970

Step 4: Calculate the weighted average unit cost:

• Weighted Average Unit Cost = Total Cost / Total Units
• Weighted Average Unit Cost = $7,970 / 690 ≈ $11.55

Answer:

1. $11.55 per unit

---

b. Determine the cost of goods sold on October 29.

Step 1: Determine the number of units sold on October 29:

• Sale on October 29: 300 units

Step 2: Use the weighted average unit cost calculated just before the sale:

• Weighted Average Unit Cost = $11.55

Step 3: Calculate the cost of goods sold (COGS):

• COGS = Units Sold * Weighted Average Unit Cost
• COGS = 300 * 11.55 = $3,465

Answer: 2. $3,465

---

c. Determine the inventory on October 31.

Step 1: Calculate the remaining inventory after October 29 sale:

• Total units after October 29 sale:
  • Total Units before Sale = 690 units
  • Units Sold on October 29 = 300 units
  • Remaining Units = 690 - 300 = 390 units

Step 2: Use the weighted average cost to find the remaining inventory value:

• Total Inventory Value after Sale = Remaining Units * Weighted Average Unit Cost
• Total Inventory Value = 390 * $11.55 = $4,504.50

Answer: 3. $4,504.50

This gives you a complete calculation based on the transactions provided.