Ivanhoe Company uses a perpetual inventory system and reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 130 $5 $650 12 Purchase 370 6 2,220 23 Purchase 200 7 1,400 30 Inventory 250 (a1) Calculate the weighted-average cost per unit, using a perpetual inventory system. Assume a sale of 400 units occurred on June 15 for a selling price of $8 and a sale of 50 units on June 27 for $9. (Round intermediate calculations to O decimal places, eg. 152 and final answers to 3 decimal places, eg. 5.125.) June 1 $ June 12 $ June 15 $ June 23 $ June 27 $

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.