The inventory records for Radford Co.reflected the following:

-What is the amount of gross margin assuming the weighted-average inventory cost flow method?
A)$3,015
B)$2,412
C)$1,314
D)$2,970

Question

The inventory records for Radford Co.reflected the following:
 
-What is the amount of gross margin assuming the weighted-average inventory cost flow method?
A)$3,015 
B)$2,412 
C)$1,314 
D)$2,970

Quizplus · Accepted Answer

Average cost per unit = Total cost of the inventory available ÷ Total number of units available
Average cost per unit = [(100 × $4.00)+ (300 × $4.40)+ (500 × $4.60)+ (100 × $4.80)] ÷ 1,000 units = $4.50 per unit
Cost of goods sold = Average cost per unit × Number of units sold
Cost of goods sold = 900 units × $4.50 per unit = $4,050
Gross margin = Sales - Cost of goods sold
Gross margin = (900 × $7.80)- $4,050 = $2,970

The Inventory Records for Radford Co.reflected the Following