Use the weighted-average inventory method for the following problem: The beginning inventory on August 1 has two items that are valued at $100 each. On August 8, three items were purchased at $250 per unit. On August 15, three units were sold. On August 25, three units were purchased for $275 each. What is the average cost of units in this inventory

Average cost units in inventory=$1,205

Explanation:

August 8

Weighted average cost in August 8

= ((2 * 100) + (3 * 250)) / 5=$190

Cost of goods sold in August 15 = 190 * 3 = 570

Balance in inventory in August 15 = 950 - 570 = 380

Weighted average cost in August 25 = 380 + (3 * 275) / (2+3) = 241 per

Average cost of units = $241 per unit

Average cost units in inventory in August 25 = $241*5 = 1205

Average cost units in inventory=$1,205