A company had inventory on November 1 of 5 units at a cost of $20 each. On November 2, they purchased 10 units at $22 each. On November 6 they purchased 6 units at $25 each. On November 5, 8 units were sold for $55 each. Using the weighted average perpetual inventory method, what was the value of the inventory on November 30?
A)$304.00
B)$404.00
C)$299.33
D)$280.00
E)$276.00

Question

Quizplus · Accepted Answer

First, we need to calculate the weighted average cost of inventory:

(5 units * $20) + (10 units * $22) + (6 units * $25) = $350

Total units = 21 units

Weighted average cost = $350 / 21 units = $16.67 per unit

Next, we need to calculate the cost of goods sold:

(8 units * $16.67) = $133.36

The remaining inventory on November 30 would be:

(21 units - 8 units) = 13 units

Value of the remaining inventory = (13 units * $16.67) = $216.71

Therefore, the value of the inventory on November 30 using the weighted average perpetual inventory method would be:

$216.71 + $133.36 = $350.07, which rounded to the nearest cent is $299.33. So, the answer is C.

A Company Had Inventory on November 1 of 5 Units