Moath Company reports the following for the month of June. Units Unit Cost Total
ID: 2490211 • Letter: M
Question
Moath Company reports the following for the month of June.
Units
Unit Cost
Total Cost
A- Calulate Weighted Average Unit Cost. (Round answer to 2 decimal places, e.g. 15.25.)
B- Compute the cost of the ending inventory and the cost of goods sold using the average-cost method. (Round answers to 0 decimal places, e.g. 1,250.)
C- Will the results in (a) be higher or lower than the results under FIFO and LIFO?
Units
Unit Cost
Total Cost
June 1 Inventory 344 $5 $ 1,720 12 Purchase 688 8 5,504 23 Purchase 516 11 5,676 30 Inventory 172Explanation / Answer
A.
Units
Unit Cost
Total Cost
Jun-01
Inventory
344
$ 5
$ 1,720
Jun-12
Purchase
688
$ 8
$ 5,504
Jun-23
Purchase
516
$ 11
$ 5,676
1548
$ 12,900
Weighted average unit cost = Total cost of purchases/Units purchased = $12,900/1,548 units = $8.33 per unit
B.
Cost of ending inventory = 172 units * $8.33 = $1,433
Units sold = Beginning inventory + Unit purchased – Ending inventory = 344 + 688 + 516 -172 = 1376 units
Cost of goods sold = 1376 units * $8.33 = $11,462
Units
Unit Cost
Total Cost
Jun-01
Inventory
344
$ 5
$ 1,720
Jun-12
Purchase
688
$ 8
$ 5,504
Jun-23
Purchase
516
$ 11
$ 5,676
1548
$ 12,900