Problem 6-8A (Part Level Sub Wildhorse Co. is a retaile following information fo

Question

Problem 6-8A (Part Level Sub Wildhorse Co. is a retaile following information for Wildhorse Co. for the month of January 2017 er operating in Calgary, Alberta. Wildhorse Co. uses the perpetual inventory method. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the Description Quantity Unit Cost or Selling Price Dec. 31 Ending inventory Jan. 2 Purchase Jan. 6 Sale Jan. 9 Purchase lan. 10 Sale Jan. 23 Purchase Jan. 30 Sale 148 $22 184 130 (al) Calculate average cost for each unit. (Round answers to 3 decimal places, e.g. 5. 125.) Jan. 1 Jan. 6 s 22.797 lan. 9 lan. 10 Jan. 23 an. 30

Explanation / Answer

Wildhorse Co.

Computation of average cost for each unit (assuming perpetual inventory system):

Date

Average cost for each unit

1-Jan

$22

2-Jan

$22.797

6-Jan

$22.797

9-Jan

$24.377

10-Jan

$24.377

23-Jan

$25.583

30-Jan

$25.583

Date

Purchases

Sales

Balance

Average Unit Price

1-Jan

Beginning Balance

148 units x $22 = $3,256

$22

2-Jan

98 units x $24 = $2,352

$3,256 + $2,352/246 units

$22.797

6-Jan

164 x $22.797 = $3,739

82 units x $22.797 = 1,869

$22.797

9-Jan

80 units x $26 =$2,080

2,080 + 1,869/162

$24.377

10-Jan

52 units x $24.377 =$1,268

110 units x $24.377 = $2,681

$24.377

23-Jan

94 units x $27 =$2,538

2,538 +2,681/204

$25.583

30-Jan

130 x $25.583 =$3,326

74 units x $25.583 =$1,893

$25.583

Date

Average cost for each unit

1-Jan

$22

2-Jan

$22.797

6-Jan

$22.797

9-Jan

$24.377

10-Jan

$24.377

23-Jan

$25.583

30-Jan

$25.583

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