DeLuca Produce uses the weighted-average method to value its inventory and repor

Question

DeLuca Produce uses the weighted-average method to value its inventory and report cost of goods sold. The following data were obtained from the company’s records at December 31, 2017 relative to one of its major products: Units, Cost/Unit, Total Cost (In Order): Inventory @ 1/1/2017 90,000 $5.51 $495,900 Purchases: 3/14/2017 345,000 $5.52 1,904,400 6/24/2017 250,000 $5.48 1,370,000 9/15/2017 320,000 $5.52 1,766,400 10/8/2017 285,000 $5.49 1,564,650 11/28/2017 210,000 $5.47 1,148,700 (1,500,000= total units of inventory and purchases), ($8,250,050= total cost of inventory and purchases)

A physical count of the inventory at December 31, 2017 revealed that 94,500 units of the product remained on hand.

Weighted-Average Method Amount 1) Inventory at December 31, 2017 under the Weighted-Average Method as reported by DeLuca Produce was? (Give Amount)

Weighted-Average Method Amount 2) Cost of Goods Sold at December 31, 2017 under the WeightedAverage Method as reported by DeLuca Produce was? (Give Amount)

Explanation / Answer

Ans. Date Transactions Units Cost/Unit Total cost 1-Jan-17 Inventory 90000 5.51 495900 14-Mar-17 Purchase 345000 5.52 1904400 24-Apr-17 Purchase 250000 5.48 1370000 15-Sep-17 Purchase 320000 5.52 1766400 8-Oct-17 Purchase 285000 5.49 1564650 28-Nov-17 Purchase 210000 5.47 1148700 Total 1500000 8250050 *Weighted average cost per unit = Total cost / Total units 8250050 / 1500000 5.50 *Cost of ending inventory (31dec.2017)   = Weighted average cost per unit * Ending inventory units 5.50 * 94500 519750 *Cost of goods sold   =   Total cost - cost of ending inventory 8250050 - 519750 7730300

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