Perpetual Inventory Using Weighted Average Beginning inventory, purchases, and s

Question

Perpetual Inventory Using Weighted Average Beginning inventory, purchases, and sales for 30xT are as follows: Assuming a perpetual inventory system and using the weighted average method, determine the weighted average unit cost after the May 23 purchase. Assuming a perpetual inventory system and using the weighted average method, determine the cost of the merchandise sold on May 26. Assuming a perpetual inventory system and using the weighted average method, determine the inventory on May 31. When the average cost method is used In a perpetual inventory system. 3n average unit cost for each item is computed each time a purchase is made This unit cost is used to determine the cost of each sale unbit another purchase is made and a new average is computed

Explanation / Answer

a) In the perpetual inventory system we have to calculate the cost Per unit after every purchases.

After the May 23 Purchases the weighted average unit cost will be

= [(50-35)*80+60*90]/15+60

= $88 Per Unit

b) Cost of the merchandise sold on may 26

= 30*88

= $2640

c) Inventory on May 31

= [(50+60)-(35+55)]*88

= $1760

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