A company had 240 units of inventory at a cost of $148 each on April 1. On April 5, the company purchased 440 units of inventory for $168 each. On April 12, the company purchased 140 units for $208 each. On April 20, 480 units were sold. Given this information, determine the cost of the 480 units sold using the weighted average periodic inventory method. (Do not round your intermediate calculations; round the final answer to nearest dollar amount.)
A)$57,452.
B)$63,120.
C)$65,120.
D)$81,108.
E)$83,108.

Question

Quizplus · Accepted Answer

To use the weighted average periodic inventory method, we need to calculate the weighted average cost per unit of inventory.

Total cost of inventory on April 1 = 240 units × $148 = $35,520
Total cost of inventory purchased on April 5 = 440 units × $168 = $73,920
Total cost of inventory purchased on April 12 = 140 units × $208 = $29,120
Total cost of inventory = $35,520 + $73,920 + $29,120 = $138,560
Total units of inventory = 240 + 440 + 140 = 820

Weighted average cost per unit = Total cost of inventory / Total units of inventory
= $138,560 / 820
= $169

Now we can use this weighted average cost per unit to calculate the cost of goods sold.

Cost of goods sold = Cost per unit × Number of units sold
= $169 × 480
= $81,120

Therefore, the cost of the 480 units sold using the weighted average periodic inventory method is $81,120. The closest option is (D) $81,108.

A Company Had 240 Units of Inventory at a Cost