The weighted average cost of an inventory item is calculated by

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Quizplus · Accepted Answer

The weighted average cost of an inventory item is calculated by dividing the cost of goods available for sale by the number of units available during the period. This method takes into account both the cost and the quantity of the items in inventory, providing a more accurate representation of the average cost per unit. Option A only considers the cost of the units purchased, while option B only considers the number of units on the ending inventory. Option D is incorrect because it divides the cost of goods sold by the number of units available during the period, which would result in an average cost that does not reflect the inventory remaining at the end of the period.

The Weighted Average Cost of an Inventory Item Is Calculated