A company had 60 units of inventory at a cost of $15 each on January 1. On March 25, the company purchased 40 units for $17 each. On July 10, the company purchased 20 units for $18 each. Given this information, determine the weighted average unit cost under the periodic inventory method. (Do not round your intermediate calculations; round the final answer to nearest whole cent.)
A)$16.67
B)$17.00
C)$18.00
D)$16.17
E)$15.00

Question

Quizplus · Accepted Answer

To calculate the weighted average unit cost under the periodic inventory method, we need to first find the total cost of all the units purchased and then divide by the total number of units.

Total cost of 60 units purchased on Jan 1: 60 x 15 = $900
Total cost of 40 units purchased on Mar 25: 40 x 17 = $680
Total cost of 20 units purchased on Jul 10: 20 x 18 = $360

Total cost of all units purchased: 900 + 680 + 360 = $1940
Total number of units purchased: 60 + 40 + 20 = 120

Weighted average unit cost: 1940/120 = $16.17, rounded to the nearest penny.

Therefore, the best choice is D) $16.17.

A Company Had 60 Units of Inventory at a Cost