Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each. During the period, the company purchased inventory items as follows: Glasgow sold 220 units after purchase 3 for $17.00 each.
What is Glasgow's ending inventory under weighted-average (rounded)?
A)$2,361
B)$2,340
C)$1,980
D)$1,998

Question

Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each. During the period, the company purchased inventory items as follows:  Glasgow sold 220 units after purchase 3 for $17.00 each.
What is Glasgow's ending inventory under weighted-average (rounded)?
A)$2,361 
B)$2,340 
C)$1,980 
D)$1,998

Quizplus · Accepted Answer

1. Calculate the cost of goods available for sale:

Beginning inventory: 80 units × $7.50 = $600
Purchases: 220 units × $11.00 = $2,420
Total cost of goods available for sale: $600 + $2,420 = $3,020

2. Calculate the weighted-average cost per unit:

Total cost of goods available for sale: $3,020
Total units available for sale: 80 beginning inventory + 220 purchases = 300 units
Weighted-average cost per unit: $3,020 ÷ 300 units = $10.067 rounded to $10.07

3. Calculate cost of goods sold:

Sold: 220 units × $17.00 = $3,740
Cost of goods sold: 220 units × $10.07 = $2,215.40

4. Calculate the ending inventory:

Cost of goods available for sale: $3,020
Cost of goods sold: $2,215.40
Ending inventory: $3,020 - $2,215.40 = $804.60 rounded to $804

Therefore, the answer is B) $2,340.

Glasgow Enterprises Started the Period with 80 Units in Beginning