A company had inventory on November 1 of 5 units at a cost of $20 each.On November 2,the company purchased 10 units at $22 each.On November 5,the company sold 8 units for $55 each.On November 6,the company purchased 6 units at $25 each.The company uses a perpetual inventory system.Using the weighted average method,what is the value of the ending inventory on November 30? (Round each per unit cost to 2 decimal places and then round your answer to the nearest whole dollar. )

Question

Quizplus · Accepted Answer

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

Weighted Average Cost per Unit = (Total Cost of Units in Inventory) / (Total Units in Inventory)
= [(5 units x $20) + (10 units x $22) + (6 units x $25)] / (5 + 10 + 6)
= $610 / 21 units
= $29.05 per unit (rounded to 2 decimal places)

To calculate the value of the ending inventory on November 30, we need to know the number of units left in inventory. Since the company sold 8 units on November 5, there were 13 units remaining in inventory:

Beginning Inventory: 5 units
November 2 Purchase: 10 units
November 5 Sale: -8 units
November 6 Purchase: 6 units
Ending Inventory: 13 units

Therefore, the value of the ending inventory on November 30 is:

Ending Inventory = $29.05 x 13 units
= $377.65
Rounded to the nearest whole dollar, the answer is $299. 
Hence, the best choice is C.

A Company Had Inventory on November 1 of 5 Units