In its first month of operations, Crane Company made three purchases of merchandise in the following sequence: (1) 200 Uhits at $8, (2) 300 units at $8, and (3) 400 units at $9. Crane uses a periodic inventory system. (a1) Your Answer Correct Answer Your answer is correct. Calculate weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.) Weighted-average unit cost eTextbook and Media Solution (a2) x Your answer is incorrect. $ Cost of the ending inventory 8 Compute the cost of the ending inventory under the average-cost method, assuming there are 100 units on hand at the end of the period. (Round answer to 0 decimal places, e.g. 125.) $ Attempts: 3 of 3 used 1600
In its first month of operations, Crane Company made three purchases of merchandise in the following sequence: (1) 200 Uhits at $8, (2) 300 units at $8, and (3) 400 units at $9. Crane uses a periodic inventory system. (a1) Your Answer Correct Answer Your answer is correct. Calculate weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.) Weighted-average unit cost eTextbook and Media Solution (a2) x Your answer is incorrect. $ Cost of the ending inventory 8 Compute the cost of the ending inventory under the average-cost method, assuming there are 100 units on hand at the end of the period. (Round answer to 0 decimal places, e.g. 125.) $ Attempts: 3 of 3 used 1600
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 58E: Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following...
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![### Problem Statement
In its first month of operations, Crane Company made three purchases of merchandise in the following sequence:
1. 200 units at $6
2. 300 units at $8
3. 400 units at $9
Crane uses a periodic inventory system.
### Part (a1)
**Question:**
Calculate the weighted-average unit cost. (Round answer to 3 decimal places, e.g., 5.125)
**Answer:**
- Your answer is correct.
- Weighted-average unit cost: \$8.000
### Part (a2)
**Question:**
Compute the cost of the ending inventory under the average-cost method, assuming there are 100 units on hand at the end of the period. (Round answer to 0 decimal places, e.g., 125)
**Answer:**
- Your answer is incorrect.
- Cost of the ending inventory: \$1600
**Explanation:**
To calculate the weighted-average unit cost, you need to find the total cost of all the units and divide it by the total number of units purchased:
1. Total units purchased = 200 + 300 + 400 = 900 units
2. Total cost of purchases = (200 * $6) + (300 * $8) + (400 * $9) = $1200 + $2400 + $3600 = $7200
3. Weighted-average unit cost = Total cost / Total units = $7200 / 900 = $8.000
To compute the cost of the ending inventory using the average-cost method, given that there are 100 units on hand:
1. Ending inventory cost = Weighted-average unit cost * Number of units on hand
2. Ending inventory cost = $8.000 * 100 = $800
Note: The correct ending inventory cost should be $800, while the answer provided was $1600, indicating an error in the calculation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0d1f03dc-16fb-4834-9136-6d6472c9ed62%2F1b07c8c6-ae0b-4b69-b6a4-766d54858fbf%2Fxwoxvq8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Problem Statement
In its first month of operations, Crane Company made three purchases of merchandise in the following sequence:
1. 200 units at $6
2. 300 units at $8
3. 400 units at $9
Crane uses a periodic inventory system.
### Part (a1)
**Question:**
Calculate the weighted-average unit cost. (Round answer to 3 decimal places, e.g., 5.125)
**Answer:**
- Your answer is correct.
- Weighted-average unit cost: \$8.000
### Part (a2)
**Question:**
Compute the cost of the ending inventory under the average-cost method, assuming there are 100 units on hand at the end of the period. (Round answer to 0 decimal places, e.g., 125)
**Answer:**
- Your answer is incorrect.
- Cost of the ending inventory: \$1600
**Explanation:**
To calculate the weighted-average unit cost, you need to find the total cost of all the units and divide it by the total number of units purchased:
1. Total units purchased = 200 + 300 + 400 = 900 units
2. Total cost of purchases = (200 * $6) + (300 * $8) + (400 * $9) = $1200 + $2400 + $3600 = $7200
3. Weighted-average unit cost = Total cost / Total units = $7200 / 900 = $8.000
To compute the cost of the ending inventory using the average-cost method, given that there are 100 units on hand:
1. Ending inventory cost = Weighted-average unit cost * Number of units on hand
2. Ending inventory cost = $8.000 * 100 = $800
Note: The correct ending inventory cost should be $800, while the answer provided was $1600, indicating an error in the calculation.
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