Answer:
$190.75
Explanation:
In this question, we are asked to use weighted average method to find the cost to which the 14 units sold is closest to.
We proceed as follows;
On April one, there were 9 items in the inventory with a cost of $13 per item. The total cost here would be 13 * 9 = $117
On April 18th, we had 15 items at $14 cost per piece which gives a total of 14 * 15 = $210
On April 29, 14 units were sold. We need to find the cost to which this was closest using the weighted cost approach.
The total costs for April 1 and 18 would be $117+ $210 = $327
The weighted average cost per unit on both dates is $327/24 = $13.625
The cost of 14 units sold would be = 14 * $13.625 = $190.75
Answer:
Using weighted average, the cost of the 14 units sold is closest to $190.75
Explanation:
The Weighted Average Cost method calculates a new cost per units with each purchase made.
The new cost per unit after the purchase on April 18 is calculated as follows:
Cost per Unit = Total Cost / Total Number of Units
= ((9 units × $13) + (15 units × $14)) / (15+9)
= $327 /24
= $ 13.63
The cost of sale on April 29 is calculated on the cost per unit as follows:
Cost of Sale = Number of units sold × Cost per unit
= 14 × $13.63
= $190.75
