Monarch Company uses a weighted-average perpetual inventory system, and has the following purchases and sales: January 1, 20 units were purchased at $10 per unit. January 12, 12 units were sold. January 20, 18 units were purchased at $11 per unit. What is the value of ending inventory?
A. 272.
B. 126.
C. 398.
D. 120.

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fakunle32 fakunle32 · Answer 1 · 2020-03-09T03:00:54+01:00

Answer:

The answer to this question is A. 272

Explanation:

The total goods available for sale = 38 units (20 units + 18 units)

Cost of Goods Available for Sale = $398 (i.e ($10 x 20 units) + ($11 x 18 units) = $200 + $198 )

weighted-average cost per unit is therefore = $398/ 38 units = $10.47 per unit

Value of ending inventory = (20 -12 +18) x $10.47 = $272

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abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2022-01-11T12:50:06+01:00

Based on the information given the value of ending inventory is $278.

First step is to calculate the cost of goods sold

Cost of goods sold = 12 units ×$10 per unit

Cost of goods sold = $120

Second step is to calculate the average cost

Average cost = [(8 ×$10) + (18 ×$11)]/26 units

Average cost=$80+$198/26 units

Average cost=$278/26 units

Average cost = $10.69/unit

Third step is to calculate the value of ending inventory

Value of Ending inventory = 26 units × $10.69/unit

Value of Ending inventory= $277.94

Value of Ending inventory=$278

Inconclusion the value of ending inventory is $278.

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