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8 August, 22:10

Using the data below, determine the ending inventory amount assuming the weighted average method with a periodic inventory system.

1. Beginning inventory, 10 units

2. Purchases, 20 units

3. Total cost of units available for sale, $3,000

4. Ending inventory, 12 units

a) $3000 b) $12000 c) $100 d) None of these

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Answers (1)
  1. 8 August, 22:35
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    d) None of these

    Explanation:

    Weighted average rate is the inventory value at the average cost, whatever the price is paid. The total value of the inventory is divided by the total units to calculate weighted average rate. Formula to calculate the weighted average rate is

    Weighted average rate = Total Cost of units available for sale / Numbers of unit available for sale

    Weighted average rate = $3,000 / (10 units + 20 units) = $3,000 / 30 units = $100 per units

    Closing Inventory value = $100 x 12 units = $1,200
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