0:00
Hello everyone.
00:01
So the question says that the firm uses the weighted average cost method with a perpetual inventory system.
00:08
We need to determine the cost of merchandise sold for each sale and the inventory balance after each sale.
00:14
First transaction says that on january 1, inventory of 15 ,000 units at $60 is given.
00:22
So in inventory column we'll write quantity as $15 ,000, $60 which is equals to 900 ,000 dollars moving to the next transaction which says on march 18 sale of 12 ,000 units is given so 12 ,000 units at 60 dollars per unit is equals to 720 ,000 dollars now once we total this we'll get 15 ,000 plus minus 12 ,000 that is our sale which is equal to 3 ,000 units this is our number of units now we can calculate unit cost by subtracting first finding out our total cost so total cost will be 900 ,000 units minus 720 ,000 units that will be 180 ,000 units so on dividing 180 ,000 units by 3 ,000 we'll get 60 dollars only yeah so this is our unit cost for 3 ,000 units.
01:37
Now moving ahead to next transaction which says on made to a purchase of 27 ,000 units at $62 was made.
01:46
So here 27 ,000 units at $62 is equals to $1 ,674 ,000.
02:04
So our total will be our inventory that was left of 3 ,000 units plus 27 ,000 are new purchase that is equals to 30 ,000 units will be our closing inventory then our total cost will be $180 ,000 minus $1 ,674 ,000 which gives $1 ,8504 ,000.
02:37
Now by dividing total cost by quantity we'll get our unit cost that is $60 ,000.
02:42
Point eight dollars now moving to the next transaction that says on august nine two two thousand five hundred units were sold so we'll write 22 ,500 units for sixty one point eight dollars as we can see our closing inventory was for this you for this unit cost only so it will be one million three hundred and ninety thousand five hundred dollars now, our total inventory, closing inventory will be 30 ,000 minus 22 ,500, that is 7 ,500 units...