Question

The following information was available from the inventory records of Vaughn Manufacturing for January: Units Unit Cost Total Cost Balance at January 1 9200 $9.75 $89700 Purchases: January 6 6300 10.38 65394 January 26 8100 10.66 86346 Sales January 7 (7400 ) January 31 (11300 ) Balance at January 31 4900
Assuming that Vaughn does not maintain perpetual inventory records, what should be the inventory at January 31, using the weighted-average inventory method, rounded to the nearest dollar?

Answer 1

Answer:

$50,127

Explanation:

The computation of the average cost per unit is shown below:

= (Beginning 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)

= (9,200 units × $9.75 + 6,300 units × $10.38+8,100 units × $10.66) ÷ (9,200 units + 6,300 units + 8,100 units)

= ($89,700 + $65,394 + $86,346 ) ÷ (23,600 units)

= ($241,440) ÷ (23,600 units)

= $10.23 per unit

Now the ending inventory would be

= Ending inventory units × average cost per unit

= 4,900 units × $10.23 per unit

= $50,127