During 2021, a company sells 25 units of inventory. The company has the following inventory purchase transactions for 2021: Number Unit Date Transaction of Units Cost Total Cost Jan. 1 Beginning inventory Sep. 8 Purchase 20 $50 $1,000 10 78 780 30 $1,780 Calculate ending inventory and cost of goods sold for 2021 assuming the company uses the weighted-average cost method. (Round weighted-average unit cost to 4 decimal places. Round your final answers to the nearest dollar amount.) Ending inventory Cost of goods sold

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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**Inventory Management: Weighted-Average Cost Method**

**Scenario:**  
During 2021, a company sells 25 units of inventory. The company has the following inventory purchase transactions for 2021:

| Date     | Transaction          | Number of Units | Unit Cost | Total Cost |
|----------|----------------------|-----------------|-----------|------------|
| Jan. 1   | Beginning inventory  | 20              | $50       | $1,000     |
| Sep. 8   | Purchase             | 10              | $78       | $780       |
|          |                      | **30**          |           | **$1,780** |

**Task:**  
Calculate the ending inventory and cost of goods sold for 2021 assuming the company uses the weighted-average cost method. (Round weighted-average unit cost to 4 decimal places. Round your final answers to the nearest dollar amount.)

**Answer Fields:**

- Ending inventory: [              ]
- Cost of goods sold: [              ]

**Explanation:**

To compute the weighted-average cost per unit:

1. Total cost of inventory = $1,780
2. Total units = 30

Weighted-average cost per unit = Total cost / Total units
= $1,780 / 30

Calculate the cost of goods sold and ending inventory based on the weighted-average cost per unit and provide rounded dollar amounts.
Transcribed Image Text:**Inventory Management: Weighted-Average Cost Method** **Scenario:** During 2021, a company sells 25 units of inventory. The company has the following inventory purchase transactions for 2021: | Date | Transaction | Number of Units | Unit Cost | Total Cost | |----------|----------------------|-----------------|-----------|------------| | Jan. 1 | Beginning inventory | 20 | $50 | $1,000 | | Sep. 8 | Purchase | 10 | $78 | $780 | | | | **30** | | **$1,780** | **Task:** Calculate the ending inventory and cost of goods sold for 2021 assuming the company uses the weighted-average cost method. (Round weighted-average unit cost to 4 decimal places. Round your final answers to the nearest dollar amount.) **Answer Fields:** - Ending inventory: [ ] - Cost of goods sold: [ ] **Explanation:** To compute the weighted-average cost per unit: 1. Total cost of inventory = $1,780 2. Total units = 30 Weighted-average cost per unit = Total cost / Total units = $1,780 / 30 Calculate the cost of goods sold and ending inventory based on the weighted-average cost per unit and provide rounded dollar amounts.
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