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:

The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round unit cost to two decimal places, if necessary.

Jan. 1 Inventory 30,000 units at $30.00 Mar. 18 Sale 24,000 units May 2 Purchase 54,000 units at $31.00 Aug. 9 Sale 45,000 units Oct. 20 Purchase 21,000 units at $32.10

Explanation / Answer

Weighted average cash flow method under perpetual inventory system :

Given the inventory and also the cost per units from that we can form a table that shows the cost of merchandise sold and also inventory which as follows

Inventory value under weighted average method = 1137600

Cost of goods sold = 2110500

Total quantity = 36000 and also

Unit cost = 31.6

Months PURCHASES COST OF MERCHANDISE SOLD INVENTORY DATE QUANTITY UNIT COST TOTAL COST QUANTITY UNIT COST TOTAL COST QUANTITY UNIT COST TOTAL COST Jan 1 30000 30 900000 Mar 18 24000 30 720000 6000 30 180000 may 2 54000 31 1674000 60000 30.9 1854000 aug 9 45000 30.9 1390500 15000 30.9 463500 oct 20 21000 32.10 674100 36000 31.6 1137600 balances 2110500 1137600

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