During the year, Wright Company sells 470 remote-control airplanes for $110 each. The company has the following inventory purchase transactions for the year. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 60 $ 82 $ 4,920 May. 5 Purchase 250 85 21,250 Nov. 3 Purchase 200 90 18,000 510 $ 44,170 Calculate ending inventory and cost of goods sold for the year, assuming the company uses weighted-average cost.

Units of inventory = 40 units

Value the closing inventory =  $ 3,464.31

Cost of goods sold =  $40,705.69

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.

Weighted average cost = Total value of stock/ Total units

Step 1

Calculate the weighted average price

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

Weighted average cost = Total value of stock/ Total units

The total quantity purchased  plus opening inventory before sales is 510 units

step 1

Weighted average price

= $44,170/ 510 units

= $86.607

Step 2

Calculate the closing inventory units

Closing inventory = opening inventory + purchases - sales

=510-470

= 40 units

Step 3

Value the closing inventory

= 40 × $86.60784314

= $ 3,464.31

step 4

Cost of goods sold

= 470 ×   $86.60

= $40,705.69

Units of inventory = 40 units

Value the closing inventory =  $ 3,464.31

Cost of goods sold =  $40,705.69

advanced placement tests

if it is for a job, then you should learn everything you can about the job, like what does it involve, what qualification is required and how you are the right person for that job. dress appropriately for the interview. get plenty of rest the night before. good luck!