Metaline Corp.uses the weighted average method for inventory costs and had the following information available for the year.

-The number of units transferred to finished goods during the year is:
A)3,200 units.
B)3,000 units.
C)3,400 units.
D)3,160 units.
E)3,500 units.

Question

Metaline Corp.uses the weighted average method for inventory costs and had the following information available for the year.

-The number of units transferred to finished goods during the year is: 
A)3,200 units. 
B)3,000 units. 
C)3,400 units. 
D)3,160 units. 
E)3,500 units.

Quizplus · Accepted Answer

The number of units transferred to finished goods during the year can be found by subtracting the ending inventory from the sum of the beginning inventory and purchases, and then dividing by the number of units sold. Using the given information:

Beginning inventory = 800 units
Purchases:
- 1st purchase: 1,200 units at $5 = $6,000
- 2nd purchase: 1,200 units at $6 = $7,200
Total purchases = 2,400 units for $13,200
Ending inventory = 400 units
Units sold = 2,400 + 800 - 400 = 2,800 units

Using the weighted average method:
Cost of goods available for sale = $7,800 (800 x $5 + 1,200 x $5 + 1,200 x $6)
Weighted average cost per unit = $7,800 ÷ 3,200 = $2.44
Cost of goods sold = 2,800 units x $2.44 = $6,832

Therefore, the number of units transferred to finished goods during the year is 2,800 units, which is closest to answer B) 3,000 units.