Holliday Company's inventory records show the following data: A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. The weighted-average cost per unit is
A) $7.50.
B) $8.00.
C) $8.16.
D) $8.75.

Question

Holliday Company's inventory records show the following data:  A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. The weighted-average cost per unit is
A) $7.50. 
B) $8.00. 
C) $8.16. 
D) $8.75.

Quizplus · Accepted Answer

Using the weighted-average cost method, we calculate the cost per unit as follows:

Cost of goods available for sale: 6,000 units x $8 per unit = $48,000

Weighted-average cost per unit: $48,000 ÷ 6,000 units = $8.00 per unit

Therefore, the weighted-average cost per unit is $8.00.

Holliday Company's Inventory Records Show the Following Data: a Physical