Weighted Average Cost Flow Method Under Perpetual Inventory System The following

Question

Weighted Average Cost Flow Method Under Perpetual Inventory System The following units of a particular item were available for sale during the calendar year: Jan. 1 Apr. 19 June 30 Sept. 2 Nov. 15 The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the Exhibit 5. Round unit cost to two decimal places, if necessary 4,000 units at $20 2,500 units 6,000 units at $24 4,500 units 1,000 units at $25 Inventory Sale Purchase Sale Schedule of Cost of Goods Sold Weighted Average Cost Flow Method Purchases Cost of Goods Sold Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan. 1 Apr. 19 June 30 Sept. 2 Nov. 15 Dec. 31 Balances

Explanation / Answer

Jan 1

Inventory

4000 units * $20 = $80,000

Apr 19

Cost of Goods Sold

2,500 units * $20 = $50,000

Inventory

1,500 units * $20 = $30,000

June 30

Purchases

6,000 units * $24 = $144,000

Inventory

1,500 units * $20 = $30,000

6,000 units * $24 = $144,000

Total 7,500 units for total cost of $174,000, cost per unit is = $23.20

Sep 2

Sales

4,500 units * $23.20 = $104,400

Inventory

3,000 units * $23.20 = $69,600

Nov 15

Purchases

1,000 units * $25 = $25,000

Inventory

3,000 units * $23.20 = $69,600

1,000 units * $25 = $25,000

Total 4,500 units for total cost of $94,600, cost per unit is = $21.02

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