Answer:
the average cost per unit that should be used to determine the cost of the units sold on January 28 is $ 59.00
Explanation:
The Weighted Average Cost Method calculates the new cost of Inventory with each purchase of Inventory.
The Perpetual Inventory System records the cost of inventory sold with each sale made.
Calculation of the new cost of Inventory with each purchase of Inventory :
January 10:
Cost per Unit = Total Cost / Total Number of Units
Cost per Unit = (( 600 units × $55 per unit ) + ( 1000 units × $59 per unit )) / 1600 units
= $ 57.50
January 20:
Cost per Unit = Total Cost / Total Number of Units
Cost per Unit = (( 1600 units × $57.50 per unit ) + ( 800 units × $62 per unit )) / 2400 units
= $ 59.00
There were no further purchases from this point
Thus cost per units remains at $ 59.00
Therefore the average cost per unit that should be used to determine the cost of the units sold on January 28 is $ 59.00
Answer: AVERAGE COST = $60.50
Explanation:
January 1:
Inventory unit = 600
Cost per unit = $55
Total cost = $33,000
January 10:
Purchased inventory unit = 1000
Cost per unit = $59
Total = $59,000
January 12:
Unit sold = 1200
January 20:
Purchased inventory unit = 800
Cost per unit = $62
Total = $49,600
Average cost of inventory prior to January 12 sales :
[Cost(January 1) + Cost(January 10)] ÷ unit (January 1) + unit(January 10)
= $(33,000 + 59,000) ÷ (600 +1000)
= $92,000 ÷ 1600 = $57.50
Sales made on January 12: 1200 units
Total units left in inventory :
1600 - 1200 = 400 units
Average cost of inventory after January 20 inventory purchase:
(Unit × cost per unit) ÷ total unit
Average cost =[ (400 × $57.50) + (800 × $62)] ÷ (400 + 800)
Average cost = ($23,000 + $49,600) ÷ 1200
Average cost = $(72,600 ÷ 1200) =
$60.50
