At May 1, 2022, Kibbee Company had beginning inventory consisting of 200 units with a unit cost of $7.During May, the company purchased inventory as follows: The company sold 1,000 units during the month for $12 per unit.Kibbee uses the average cost method.The weighted-average cost per unit for May is

Question

At May 1, 2022, Kibbee Company had beginning inventory consisting of 200 units with a unit cost of $7.During May, the company purchased inventory as follows:  The company sold 1,000 units during the month for $12 per unit.Kibbee uses the average cost method.The weighted-average cost per unit for May is

Quizplus · Accepted Answer

To calculate the weighted-average cost per unit for May, we need to find the total cost of the inventory available for sale and divide it by the total number of units available for sale.

Total cost of inventory available for sale: 
Beginning inventory: 200 units x $7 per unit = $1,400
May purchases: 
- 400 units x $8 per unit = $3,200
- 300 units x $7 per unit = $2,100
- 100 units x $6 per unit = $600
Total cost of purchases = $5,900

Total number of units available for sale: 
Beginning inventory: 200 units 
May purchases: 
- 400 units 
- 300 units 
- 100 units 
Total units available for sale = 1,000 units

Weighted-average cost per unit: 
($1,400 + $5,900) / 1,000 units = $7.375

At May 1, 2022, Kibbee Company Had Beginning Inventory Consisting