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 6. Round unit cost to two decimal places, if necessary.

Jan. 1 Inventory 10,000 units at $75.00 Mar. 18 Sale 8,000 units May 2 Purchase 18,000 units at $77.50 Aug. 9 Sale 15,000 units Oct. 20 Purchase 7,000 units at $80.25

Explanation / Answer

Wtd Moving Average Purchase Cost of Merchandise Sold Ending Inventory Date Purchase Units Purcahase cost/unit Total Purchase cost Sales unit Cost/unit of sales Total cost Ending Inventory Unit unit cost Total Cost Moving average cost Jan 1.                         -            10,000            75.00          750,000 75 Mar 18.                         -              8,000 75              600,000            2,000            75.00          150,000 75 May 2.          18,000 77.5          1,395,000                         -            20,000            77.25      1,545,000 77.25 Aug 9.                         -            15,000 77.25          1,158,750            5,000            77.25          386,250 77.25 Oct 20.            7,000 80.25              561,750                         -            12,000            79.00          948,000 79 Dec31. Total          1,956,750 1758750

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