A manufacturing company recorded the following data pertaining to raw material X:$\begin{array} { | l | l | l | }
\hline & \text { Units Received } & \text { Cost } \
\hline 1 / 1 / 2001 \text { Inventory } & 400 & \$ 1.00 \
\hline 1 / 8 / 2001 \text { Purchase } & 600 & \$ 1.10 \
\hline 1 / 12 / 2001 \text { Issue } & 800 & \$ 2.00 \
\hline
\end{array}$
The weighted average unit cost of raw material X at January 12, 2001 for use in costing is:
A) $1.00
B) $1.05
C) $1.06
D) $1.10

Question

A manufacturing company recorded the following data pertaining to raw material X:$\begin{array} { | l | l | l | } 
\hline & \text { Units Received } & \text { Cost } \
\hline 1 / 1 / 2001 \text { Inventory } & 400 & \$ 1.00 \
\hline 1 / 8 / 2001 \text { Purchase } & 600 & \$ 1.10 \
\hline 1 / 12 / 2001 \text { Issue } & 800 & \$ 2.00 \
\hline
\end{array}$
The weighted average unit cost of raw material X at January 12, 2001 for use in costing is:
A) $1.00
B) $1.05
C) $1.06
D) $1.10

Quizplus · Accepted Answer

The weighted average unit cost is calculated by dividing the total cost of inventory available by the total units available before the issue on January 12, 2001. Initial inventory is 400 units at $1.00 each, totaling $400. The purchase adds 600 units at $1.10 each, totaling $660. Before the issue, there are 1000 units (400 + 600) costing $1060 ($400 + $660). The weighted average cost per unit is $1060 / 1000 = $1.06.

A Manufacturing Company Recorded the Following Data Pertaining to Raw