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26 December, 12:39

Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each. During the period, the company purchased inventory items as follows: Purchase No. of Items Cost 1 200 $ 9.00 2 150 $ 9.30 3 50 $ 10.50 Glasgow sold 220 units after purchase 3 for $17.00 each. What is Glasgow's ending inventory under weighted-average (rounded) ?

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  1. 26 December, 14:24
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    The cost of ending inventory is $2340

    Explanation:

    Under the weighted average method of inventory valuation, we value the ending inventory based on the weighted average of all the available inventory for the period. The inventory available for the period includes the beginning inventory plus the purchases for the period.

    The weighted average cost of inventory can be calculated by adding the total cost of available inventory and dividing it by total number of units of available inventory.

    The weighed average cost of inventory per unit for Glasgow is,

    Total cost = 80 * 7.5 + 200 * 9 + 150 * 9.3 + 50 * 10.5 = $4320

    Total number of units = 80 + 200 + 150 + 50 = 480 units

    Weighted average cost per unit = 4320 / 480 = $9 per unit

    The units of ending inventory are = 480 - 220 = 260 units

    The cost of ending inventory is = 260 * 9 = $2340
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