Under the weighted average cost flow assumption, the cost of this item to be included as inventory in the company's year-end statement of financial position is:

Question

Quizplus · Accepted Answer

Under the weighted average cost flow assumption, the cost of a unit is calculated by dividing the total cost of goods available for sale by the total number of units available for sale.

Total cost of goods available for sale = $32,000 + $36,000 + $40,000 = $108,000
Total number of units available for sale = 500 + 400 + 600 = 1,500

Weighted average cost per unit = $108,000 ÷ 1,500 = $72

The number of units in inventory at year-end is 505 + 300 + 695 = 1,500 - 500 - 400 - 600 + 505 + 300 + 695 = 500

Therefore, the cost of inventory at year-end is:

Cost of inventory = 500 x $72 = $36,250

The correct answer is C) $36,250.

Under the Weighted Average Cost Flow Assumption, the Cost of This