A material inventory has 200 units at $21 and 300 units at $24. Using weighted-average cost, what cost is assigned to 350 units issued?
Correct Answer
A) $7,980
Weighted-average unit cost is $22.80; multiplying by 350 units gives $7,980.
Why This Is the Correct Answer
Weighted-average unit cost is $22.80; multiplying by 350 units gives $7,980.
Why the Other Options Are Wrong
Option B: $7,350
$7,350 is below the supported result for weighted-average inventory; it likely uses the wrong base, period, or account bucket.
Option C: $8,100
$8,100 is above the supported result for weighted-average inventory; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $8,400
$8,400 is above the supported result for weighted-average inventory; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Unit and cost live in different drawers; Issue Costed tells which opens.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Two, Accounting for Materials, Controlling Inventory; use the job ledger figures in the stem and recompute the same accounting measure.
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