Asked by Joshua Waterman on May 12, 2024
Verified
Shellhammer Company's inventory records show the following data for the month of September: Units‾ Unit Cost ‾ Inventory, September 1 100$3.34 Purchases: September 8 4503.50 September 18 3503.70\begin{array} { l c c } & \underline { \text { Units} } & \underline { \text { Unit Cost } } \\\text { Inventory, September 1 } &100& \$ 3.34 \\\text { Purchases: September 8 } & 450 & 3.50 \\\quad\quad\quad\quad\quad\text { September 18 }& 350 & 3.70\end{array} Inventory, September 1 Purchases: September 8 September 18 Units100450350 Unit Cost $3.343.503.70
A physical inventory on September 30 shows 200 units on hand. Calculate the value of the ending inventory and cost of goods sold if the company uses weighted average inventory costing and a periodic inventory system. Round cost per unit to 2 decimal places and ending inventory and cost of goods sold to the nearest dollar.
Weighted Average Inventory
This accounting method calculates the cost of inventory based on the average cost of all similar items in the inventory, weighted by the quantity of each item purchased.
Periodic Inventory System
An accounting method where inventory is physically counted and valued at specific intervals, used to determine cost of goods sold and ending inventory.
- Evaluate the end inventory value and the expense of goods sold utilizing multiple inventory costing methods.
Verified Answer
Cost of goods available for sale = $3204
Units available for sale 900
$3204 ÷ 900 = $3.56
Ending inventory: 200 × $3.56 = $712
Cost of goods sold: 700 × $3.56 = $2492
Learning Objectives
- Evaluate the end inventory value and the expense of goods sold utilizing multiple inventory costing methods.
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