Financial Reporting and Analysis Q227
0. The information on a company’s inventory is given below:
| Opening inventory | 0 units |
| 1st purchase | 500 units at $30/unit |
| 2nd purchase | 1,000 units at $33/unit |
| 3rd purchase | 1,200 units at $34/unit |
| Total Sales | 2,000 units at $50/unit |
Using a periodic inventory system and the weighted average method, the ending inventory value is closest to:
- Option :
- Explanation : Ending Inventory Weighted Average Calculations
Units $/unit Total $ Purchase #1 500 $30 $15,000 Purchase #2 1000 $33 $33,000 Purchase #3 1200 $34 $40,800 Total available 2,700 $88,800 Average cost = 88,800 / 2,700 = $32.89 Ending inventory
= 2,700 – 2,000 = 700 units.Cost of ending inventory = $32.89 * 700 = $23,023
