Assume that Tango Company had a beginning inventory of 100 units at a cost of $2.00 per unit.Current period purchases were 400 units at a cost of $4.00 per unit.The weighted average cost of each unit is $3.

Question

Quizplus · Accepted Answer

The weighted average cost is calculated by dividing the total cost of inventory by the total number of units. Here, it would be (100 units * $2 + 400 units * $4) / (100 units + 400 units) = $3.60 per unit, not $3.00.

Assume That Tango Company Had a Beginning Inventory of 100