ACCOUNTING Chapter 6-9) Consider the following information for Maynor Company, w
ID: 2564562 • Letter: A
Question
ACCOUNTING Chapter 6-9) Consider the following information for Maynor Company, which uses a periodic inventory system TransactionU Units Unit Cost Total Cost January 1 Beginning Inventory 14$64 70 74 80 $ 896 1,680 2,072 2,640 March 28 Purchase August 22 Purchase October 14 Purchase 24 28 Goods Available for Sale $7.288 The company sold 33 units on May 1 and 28 units on October 28 Required: Calculate the company's ending inventory and cost of goods sold using the each of following inventory costing methods. (Round the per unit cost to two decimal places and then round your answer to the nearest whole dollar.) a. FIFO Ending Inventory Cost of Goods Sold 3,010 4,278 b. LIFOExplanation / Answer
Weighted average cost method is the method in which the total units purchased are multiplied by the cost per unit and the total cost is divided by the number of units that have been purchased.
The total cost=units purchased*respective cost per unit.
Which is 99 units and $7288 cost.
Now, we divided 7288/99 which gives us $73.62
$73.62 is the weighted average cost per unit.
So, Cost of goods sold=(Number of units sold)*weighted average cost per unit.
=$(41*73.62)=$2,797.41
Ending inventory=(Total purchased units-number of units sold)*weighted average cost per unit.
=$(99-61)*73.62=$4,490.59.
Particulars
Units
Cost per unit
Unit*cost per unit
Jan-01
Opening inventory
14.00
64.00
896.00
Mar-28
Purchase
24.00
70.00
1,680.00
Aug-22
Purchase
28.00
74.00
2,072.00
Oct-14
Purchase
33.00
80.00
2,640.00
Weighted average
99.00
7,288.00
Weighted average cost per unit
73.62
Sale
61.00
73.62
closing inventory
38.00
73.62
2,797.41
Cost of goods sold
61.00
73.62
4,490.59
Particulars
Units
Cost per unit
Unit*cost per unit
Jan-01
Opening inventory
14.00
64.00
896.00
Mar-28
Purchase
24.00
70.00
1,680.00
Aug-22
Purchase
28.00
74.00
2,072.00
Oct-14
Purchase
33.00
80.00
2,640.00
Weighted average
99.00
7,288.00
Weighted average cost per unit
73.62
Sale
61.00
73.62
closing inventory
38.00
73.62
2,797.41
Cost of goods sold
61.00
73.62
4,490.59
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