Question

Perpetual Inventory Using Weighted Average

Beginning inventory, purchases, and sales for H76 are as follows:
July 1 Inventory
300 units at $120
12 Sale
210 units
23 Purchase
360 units at $135
26 Sale
330 units
a. Assuming a perpetual inventory system and using the weighted average method, determine the weighted average unit cost after the July 23 purchase.
per unit
b. Assuming a perpetual inventory system and using the weighted average method, determine the cost of the merchandise sold on July 26.
c. Assuming a perpetual inventory system and using the weighted average method, determine the inventory on July 31.

Answer 1

a. The weighted average unit cost after the July 23 purchase is approximately $128.18. b. The cost of the merchandise sold on July 26 is approximately $42,320.40. c. The inventory on July 31 is approximately $42,320.40.

Step-by-step explanation:

a. To determine the weighted average unit cost after the July 23 purchase, we need to calculate the weighted average of the existing inventory and the newly purchased units.

We start with the beginning inventory of 300 units at $120 each, which gives a total cost of $36,000. Then we add the purchase of 360 units at $135 each, which gives a total cost of $48,600.

Next, we calculate the total units by adding the beginning inventory and the purchased units (300 + 360 = 660). Finally, we divide the total cost ($36,000 + $48,600 = $84,600) by the total units (660) to find the weighted average unit cost, which is approximately $128.18.

Therefore, the weighted average unit cost after the July 23 purchase is $128.18.

b. To determine the cost of the merchandise sold on July 26, we multiply the number of units sold (330) by the weighted average unit cost ($128.18).

The cost of the merchandise sold on July 26 is approximately $42,320.40.

c. To determine the inventory on July 31, we subtract the units sold on July 26 (330) from the total units (660) to get 330 units.

Then we multiply the remaining inventory units (330) by the weighted average unit cost ($128.18) to find the inventory value.

The inventory on July 31 is approximately $42,320.40.

Answer 2

• a. The weighted average unit cost after the July 23 purchase is $128.18 per unit.
• b. The cost of the merchandise sold on July 26 is $42,359.40.
• c. The inventory on July 31 is 330 units.

Step-by-step explanation:

a. To calculate the weighted average unit cost after the July 23 purchase, you need to find the total cost and total units.

1. The total cost is calculated by adding the cost of the beginning inventory and the purchases. For example, if the beginning inventory cost $120 per unit and there were 300 units, and the July 23 purchase cost $135 per unit and there were 360 units, you would calculate (300 * $120) + (360 * $135) = $36,000 + $48,600 = $84,600.

2. The total units is calculated by adding the units of the beginning inventory and the purchases. In this example, it would be 300 + 360 = 660 units.

3. Finally, to find the weighted average unit cost after the July 23 purchase, you divide the total cost by the total units. In this case, it would be $84,600 / 660 = $128.18 per unit.

b. To determine the cost of the merchandise sold on July 26, you need to multiply the units sold by the weighted average unit cost after the July 23 purchase. For example, if 330 units were sold and the weighted average unit cost was $128.18 per unit, you would calculate 330 * $128.18 = $42,359.40.

c. To determine the inventory on July 31, you need to subtract the units sold from the total units. For instance, if 330 units were sold and the total units were 660, the inventory on July 31 would be 660 - 330 = 330 units.