Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each.During the period,the company purchased inventory items as follows:
Glasgow sold 220 units after purchase 3 for $17.00 each.
-What is Glasgow's ending inventory under weighted-average (rounded)?
A)$2,361
B)$2,340
C)$1,980
D)$1,998

Question

Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each.During the period,the company purchased inventory items as follows:
  Glasgow sold 220 units after purchase 3 for $17.00 each.
-What is Glasgow's ending inventory under weighted-average (rounded)?
A)$2,361 
B)$2,340 
C)$1,980 
D)$1,998

Quizplus · Accepted Answer

Units in ending inventory = 80 units + 400 units purchased ? 220 units sold = 260
Average cost per unit = Total cost of the inventory available ÷ Total number of units available
Average cost per unit = [(80 × $7.50)+ (200 × $9.00)+ (150 × $9.30)+ (50 × $10.50)] ÷ 480 units = $9.00 per unit
Ending inventory = Average cost per unit × Number of units in ending inventory
Ending inventory =$9.00 per unit × 260 = $2,340

Glasgow Enterprises Started the Period with 80 Units in Beginning