weighted average

• Jan 20th 2010, 10:01 AM
diehardmath4
weighted average
One of the methods permitted by generally accepted accounting principles for reporting the value of a firm's inventory is weighted average inventory pricing. The Boswell Corporation began its fiscal year with an inventory of 156 units valued at $10.55 per unit. During the year it made the purchases listed in the following Date Units Purchased Unit cost ($)
Feb 10 300 10.86
June 3 1000 10.47
Aug 23 500 10.97

At the end of the year, 239 units remained in inventory. Determine;

a) the weighted average cost of the units purchased during the year.
b) the weighted average cost of the begining inventory and all units purchased during the year
c) The value of the ending invengory based on the weighted average cost calculated in b)

a) i got this answer but it's off by

( 300 * 10.86 ) + ( 1000 * 10.47 ) + ( 500 * 10.97 ) + ( 156 * 10.55 )
__________________________________________________ ______
1967

10.664

part b is even more confusing
• Jan 20th 2010, 12:02 PM
pickslides
Hi there diehardmath4,

Quote:

Originally Posted by diehardmath4

a) i got this answer but it's off by

( 300 * 10.86 ) + ( 1000 * 10.47 ) + ( 500 * 10.97 ) + ( 156 * 10.55 )
__________________________________________________ ______
1967

10.664

This is the answer for part b) I think the denominator should be $1956$, the answer in your book is rounded to 2 decimal places as you are speaking in terms of dollars.
$\frac{ 300\times 10.86+ 1000\times 10.47+ 500\times 10.97}{1800}$