Alphabet Company,which uses the periodic inventory method,buys different letters for resale.It buys A through G in January at $4 per letter.It buys H through L at $6 per letter.It buys M through R in March at $7 per letter.It sells A,D,E,H,J and N in April. If the company uses the weighted average method,what is the cost of its ending inventory (rounded to the nearest dollar)?
A)$38
B)$48
C)$67
D)$75

Question

Quizplus · Accepted Answer

Avg.cost per unit = (GAFS cost)/(GAFS units)$100/18 letters = $5.56/letter
End)Inv.of letters = 18-6 = 12 letters * $5.56/letter = $67.

Alphabet Company,which Uses the Periodic Inventory Method,buys Different Letters for Resale.It