Axme uses a weighted average perpetual inventory system. August 2, 10 units were purchased at $12 per unit.
August 18, 15 units were purchased at $15 per unit.
August 29, 20 units were sold.
August 31, 14 units were purchased at $16 per unit.
What is the per-unit value of ending inventory on August 31?
A) $12.00.
B) $13.80.
C) $15.42.
D) $16.00.
E) $17.74.

Question

Quizplus · Accepted Answer

To calculate the per-unit value of the ending inventory on August 31, we need to use the weighted average method, which takes into consideration both the purchase price and the quantity of each purchase.

First, we need to calculate the total cost of goods available for sale:

10 units x $12 per unit = $120
15 units x $15 per unit = $225
14 units x $16 per unit = $224
Total cost of goods available for sale = $120 + $225 + $224 = $569

Next, we need to calculate the total quantity of goods available for sale:

10 units + 15 units + 14 units = 39 units

Now we can calculate the weighted average cost per unit:

$569 ÷ 39 units = $14.59 per unit

Therefore, the per-unit value of the ending inventory on August 31 is closest to $15.42 ($14.59 rounded up to the nearest cent).

The correct answer is C.

Axme Uses a Weighted Average Perpetual Inventory System