Glasgow Enterprises started the period with 65 units in beginning inventory that cost $3.40 each. During the period, the company purchased inventory items as follows. Glasgow sold 335 units after purchase 3 for $3.40 each. Purchase No. of Items Cost 1 310 $ 3.90 2 145 $ 4.00 3 60 $ 4.40 Glasgow's ending inventory under weighted average would be approximately: (Round your intermediate calculations to 2 decimal places.)

Question

Julianna Benson

Business

14 July, 11:20

Glasgow Enterprises started the period with 65 units in beginning inventory that cost $3.40 each. During the period, the company purchased inventory items as follows. Glasgow sold 335 units after purchase 3 for $3.40 each. Purchase No. of Items Cost 1 310 $ 3.90 2 145 $ 4.00 3 60 $ 4.40 Glasgow's ending inventory under weighted average would be approximately: (Round your intermediate calculations to 2 decimal places.)

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Spotty · Answer 1

Value of ending inventory = $960.4

Explanation:

To value inventory, The weighted average inventory method uses the value of weighted average price of all the batches purchased till date. The weighted average price is re-computed whenever a new batch of stock is received.

Step 1

Calculate the weighted average price

For Glasgow, we can work out the weighted average price as follows:

The total value = (65 * $3.40) + (310 * $3.90) + (145 * $4.00) + (60 * $4.40)

= $2,274

The total quantity purchased before sales

= 65 + 310 + 145 + 60

= 580 units

Weighted average price

= $2,274 / 580 units = $3.92

Step 2

Calculate the closing inventory units

Closing inventory = opening inventory + purchases - sales

= 65 + 310 + 145 + 60 - 335

= 245 units

Step 3

Value the closing inventory

= 245 * $3.92

= $960.4

Value of ending inventory = $960.4