July 1 Inventory 100 units at $60
8 Sale 60 units
15 Purchase 120 units at $75
27 Sale 84 units
Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the July 15 purchase, (b) the cost of the merchandise sold on July 27, and (c) the inventory on July 31.
Answer:
a. Weighted average unit cost: $71.25
Inventory total cost after purchase on July 15:
40 units @ $60 $ 2,400
120 units @ $75 9,000
160 $11,400
Weighted average unit cost = $71.25 ($11,400 ÷ 160 units)
b. Cost of merchandise sold (July 27): $5,985 (84 units × $71.25)
c. Inventory, July 31: $5,415 (76 units × $71.25)