27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Perpetual inventory using weighted average

Beginning inventory, purchases, and sales for WCS12 are as follows:

Oct. 1 Inventory 300 units at $8
  13 Sale 175 units
  22 Purchase 375 units at $10
  29 Sale 280 units

Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of the merchandise sold on October 29, and (c) the inventory on October 31.


To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

To determine: the weighted average unit cost after October 22 purchases.


Calculate the weighted average unit cost as follows:

Weighted average method
Quantity Unit cost Total cost of inventory in hand
125 units $8 $1,000
375 units $10 $3,750
500 units $4,750


To determine
cost of merchandise sold for each sale and inventory balance after each sale of WCS12 as on October 31.

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