Question

Glasgow Enterprises started the period with 60 units in beginning inventory that cost $2.00 each. During the period, the company purchased inventory items as follows. Glasgow sold 300 units after purchase 3 for $2.00 each. Purchase No. of Items Cost 1 390 $ 2.50 2 105 $ 2.60 3 55 $ 3.00 Glasgow's ending inventory under weighted average would be approximately: (Round your intermediate calculations to 2 decimal places

Answer 1

$778.10

Step-by-step explanation:

For computing the ending inventory using the weighted average first we need to compute the average per unit which is shown below:

= (Beginning inventory units × price per unit + purchase inventory units × price per unit + purchase inventory units × price per unit + purchase inventory units × price per unit ) ÷ (Beginning inventory units + purchase inventory units + purchase inventory units + purchase inventory unit)

= (60 units × $2 + 390 units × $2.50 + 105 units × $2.60 + 55 units × $3) ÷ (60 units + 390 units + 105 units + 55 units)

= ($120 + $975 + $273 + $165 ) ÷ (610 units)

= ($1,533) ÷ (610 units)

= $2.51

Now the ending inventory is

= (Total units available - sale units) × average cost per unit

= (610 units - 300 units) × $2.51

= $778.10