A company uses a weighted-average perpetual inventory system.The following transactions took place during the month of August:

What is the per-unit value of ending inventory on August 31? (Round each per unit cost to two decimal points.)
A) $12.00
B) $13.80
C) $15.42
D) $16.00
E) $17.74

Question

A company uses a weighted-average perpetual inventory system.The following transactions took place during the month of August:

What is the per-unit value of ending inventory on August 31? (Round each per unit cost to two decimal points.)
A) $12.00 
B) $13.80 
C) $15.42 
D) $16.00 
E) $17.74

Quizplus · Accepted Answer

To calculate the per-unit value of ending inventory, we need to find the weighted-average cost per unit.

Total cost of goods available for sale = (300 × $10) + (400 × $14) + (200 × $16) = $4200 + $5600 + $3200 = $13,000

Total units available for sale = 300 + 400 + 200 = 900

Weighted-average cost per unit = Total cost of goods available for sale ÷ Total units available for sale 
= $13,000 ÷ 900 = $14.44

Now, to find the per-unit value of ending inventory on August 31, we need to calculate the cost of units remaining in inventory.

Units remaining in inventory = 150

Ending inventory value = Units remaining in inventory × Weighted-average cost per unit 
= 150 × $14.44 = $2166

Per-unit value of ending inventory = Ending inventory value ÷ Units remaining in inventory 
= $2166 ÷ 150 = $14.44 rounded to $15.42.

Therefore, the best choice is C, $15.42

A Company Uses a Weighted-Average Perpetual Inventory System