8. A company’s information from its first year of operation is as follows: 2011 | Event | Units | NZ$/unit | Opening inventory | 0 | 0 | Purchase #1 | 1,000 | $22.50 | Purchase #2 | 800 | $25.00 | Purchase #3 | 400 | $25.50 | Sales | 1,700 | $40.00 |
Using a periodic inventory system and the weighted average method, the ending inventory value is closest to:
A. $11,975.
B. $12,165.
C. $12,700.
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Ans: A. Ending Inventory Weighted Average Calculations | Units | NZ$/unit | Total NZ$ | Purchase #1 | 1,000 | $22.50 | $22,500 | Purchase #2 | 800 | $25.00 | $20,000 | Purchase #3 | 400 | $25.50 | $10,200 |
Total available | 2,200 |
| $52,700 |
Average cost | 52,700 ÷ 2,200 | $ 23.95 |
Ending inventory | 2,200 – 1,700 = 500 units | $ 11,975 |
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