A company had inventory on November 1 of 5 units at a cost of $20 each.On November 2,the company purchased 10 units at $22 each.On November 5,the company sold 8 units for $55 each.On November 6,the company purchased 6 units at $25 each.The company uses a perpetual inventory system.Using the weighted average method,what is the value of the ending inventory on November 30? (Round each per unit cost to two decimal places and then round your answer to the nearest whole dollar.)
A)$304
B)$404
C)$299
D)$280

Question

A company had inventory on November 1 of 5 units at a cost of $20 each.On November 2,the company purchased 10 units at $22 each.On November 5,the company sold 8 units for $55 each.On November 6,the company purchased 6 units at $25 each.The company uses a perpetual inventory system.Using the weighted average method,what is the value of the ending inventory on November 30? (Round each per unit cost to two decimal places and then round your answer to the nearest whole dollar.)
A)$304
B)$404
C)$299
D)$280

Quizplus · Accepted Answer

First, we need to calculate the weighted average cost per unit for the inventory.

The total cost of the units on November 1 is: 
5 units x $20 per unit = $100

The total cost of the units purchased on November 2 is: 
10 units x $22 per unit = $220

The total cost of all units available for sale is: 
$100 + $220 = $320

The total number of units available for sale is: 
5 units + 10 units = 15 units

Using the weighted average cost method:

$320 ÷ 15 units = $21.33 per unit

Now we can calculate the value of the ending inventory on November 30:

Cost of goods available for sale: 
15 units x $21.33 per unit = $319.95

Cost of goods sold: 
8 units x $21.33 per unit = $170.64

Ending inventory: 
7 units x $21.33 per unit = $149.31

Rounding to the nearest whole dollar, the value of the ending inventory on November 30 is $299. Therefore, the best choice is C.

A Company Had Inventory on November 1 of 5 Units