Question

a company made purchases as follows. find the inventory value using three different methods. beginning inventory 230 units at $1.50 june 460 units at $1.60 july 710 units at $1.10 august 220 units at $1.15 now in inventory 390 units find the inventory value using the weighted average method. $\square$ (round to the nearest cent as needed.)

Explanation:

Step1: Calculate total cost and total units

First, we find the total cost for each purchase and the beginning inventory, then sum them up. Also, sum the total units.

• Beginning inventory: \(230 \times 1.50 = 345\)
• June: \(460 \times 1.60 = 736\)
• July: \(710 \times 1.10 = 781\)
• August: \(220 \times 1.15 = 253\)

Total cost \(= 345 + 736 + 781 + 253 = 2115\)

Total units \(= 230 + 460 + 710 + 220 = 1620\)

Step2: Find the weighted average cost per unit

The weighted average cost per unit is total cost divided by total units.
Weighted average cost per unit \(= \frac{2115}{1620} \approx 1.3056\) (rounded to four decimal places)

Step3: Calculate inventory value

Multiply the number of units in inventory (390) by the weighted average cost per unit.
Inventory value \(= 390 \times 1.3056 \approx 509.18\)

Answer:

\(509.18\)