Homework #4-Quiz Bryan Kurgan: Attempt 1 Alpha Company uses the periodic invento

Question

Homework #4-Quiz Bryan Kurgan: Attempt 1 Alpha Company uses the periodic inventory system and had the following inventory & sales activity for the month ofA May 2016: (Round all per unit calculations to the nearest penny.) Date Activity Quantity Unit Price May 1 Beginning Inventory 100 $10.10 May 5 Purchase 200 $11.00 May 15 Purchase 300 $13.00 May 25 Purchase 150 $15.00 Sales were 500 units at $20.00. Using weighted-average method, determine the doilar vatues following for the month of May: (Enter only whole dollar values.) 1. Ending Inventory 2. Cost of Goods Available for Sale 3. Cost of Goods Sold

Explanation / Answer

Alpha Company

Unit price under weighted average method,

(Total of beginning inventory and purchases)/total number of units

Total value of beginning inventory and purchases = (100 x $10.10 + 200 x $11.00 + 300 x $13.00 + 150 x $15.00)

= $9,360

Total number of units = 100 + 200 + 300 +150 = 750 units

Weighted average cost per unit = $9,360/750 = $12.50

Sales = 500 units

Ending inventory = beginning inventory + purchases – sales

            = 750 – 500 = 250 units

Value of ending inventory at weighted average cost = 250 x $12.50 =$3,125

            Hence, value of ending inventory = $3,125

= (100 x $10.10 + 200 x $11.00 + 300 x $13.00 + 150 x $15.00)

= $9,360

Hence, cost of goods available for sale = $9,360

Number of units sold = 500

Weighted average cost per unit = $12.50

Cost of goods sold = $6,250

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