Assume ShoeFanatic.com began July with 10 units of inventory that cost a total o

Question

Assume ShoeFanatic.com began July with 10 units of inventory that cost a total of $190. During July. ShoeFanatic.com purchased and sold goods as follows see score l8 Purchase 30 unit@$20 14 Sale 25 units@$40 22 Purchase 20 units@$22 30 units@$40 see score 27 Sale Suppose Shoef anatic com used the weighted-average inventory costing method and the perpetual inventory system Compute the weighted-average unit cost of the company's inventory on hand at July 8 Round weighted-average unit cost to the nearest cent 42.94% O A. $2100 OB. $1950 ??. $1975 O D. Cannot be determined from the data given Cick to select your answer 04/16/18 ? Chapter 11 Exercises nited Atemots 11:38 PM 12018 e to search

Explanation / Answer

Answer: C; $19.75

The weighted-average rate could be calculated through a division of total cost of inventory in hand by the total number of units in hand.

Total cost = Beginning inventory + July 8 purchase of inventory

                = $190 + ($20 × 30 units)

                 = $190 + $600

                 = $790

Total number of units = Beginning units + July 8 purchasing units

                                    = 10 + 30

                                    = 40 units

Weighted-average rate = Total cost / Total number of units

                                    = $790 / 40 units

                                    = $19.75

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