Question

Item 1 Item 1 Seminole Company began the year with 23,000 units of product in its January 1 inventory costing $15 each. It made purchases of its product during the year as follows. The company uses a periodic inventory system. On December 31, a physical count reveals that 40,000 units of its product remain in inventory. Mar May 25 39,000 units $20.00 each Aug Nov. 10 35,000 units $26.00 each 7 30,000 units $18.00 each 1 23,000 units $25.00 each Required: 1. Compute the number and total cost of the units available for sale in year 2017

Answer 1

Answer:

Total cost= $3,120,000

Explanation:

Giving the following information:

January 1: 23,000 units $15 each

Mar 25: 39,000 units $20.00 each

May 10: 35,000 units $26.00 each

Aug 10: 30,000 units $18.00 each

Nov.   1 23,000 units $25.00 each

Total units= 150,000 units

To calculate the cost we will use the weighted average method:

Average cost= (15 + 20 + 26 + 18 + 25)/5 = $20.8

Total cost= $20.8*150,000= $3,120,000