Trio Ltd uses a periodic inventories system and rounds the average unit cost to the nearest dollar. The following data relates to Trio Ltd for the year ended 30 June 2021. Opening inventories 150units@average cost of $32 each January purchases 35 units @ $35 each March purchases 18 units @ $ 38 each June purchases 50 units @ $30 each September purchases 27 units @ $32 each Ending inventories 65 units \begin{array}{ll} ext { Opening inventories } & ext { 150units@average cost of \$32 each }\ ext { January purchases } & 35 ext { units @ \$35 each } \ ext { March purchases } & 18 ext { units @ } \$ 38 ext { each }\ ext { June purchases } & 50 ext { units @ \$30 each } \ ext { September purchases } & 27 ext { units @ \$32 each } \ ext { Ending inventories } & 65 ext { units }\end{array} Opening inventories January purchases March purchases June purchases September purchases Ending inventories 150units@average cost of $32 each 35 units @ $35 each 18 units @ $38 each 50 units @ $30 each 27 units @ $32 each 65 units The cost of ending inventories using the weighted average cost method (rounded to the nearest dollar) is:A) $2 106B) $2 136C) $4 273D) $6 966

Question

Trio Ltd uses a periodic inventories system and rounds the average unit cost to the nearest dollar. The following data relates to Trio Ltd for the year ended 30 June 2021.    Opening inventories   150units@average cost of $32 each   January purchases  35  units @ $35 each   March purchases  18  units @  $ 38  each   June purchases  50  units @ $30 each   September purchases  27  units @ $32 each   Ending inventories  65  units  \begin{array}{ll}	ext { Opening inventories } & 	ext { 150units@average cost of \$32 each }\	ext { January purchases }  &  35 	ext { units @ \$35 each } \	ext { March purchases }  &  18 	ext { units @ } \$ 38 	ext { each }\	ext { June purchases }  &  50 	ext { units @ \$30 each } \	ext { September purchases }  &  27 	ext { units @ \$32 each } \	ext { Ending inventories }  &  65 	ext { units }\end{array}  Opening inventories   January purchases   March purchases   June purchases   September purchases   Ending inventories  ​  150units@average cost of $32 each  35  units @ $35 each  18  units @  $38  each  50  units @ $30 each  27  units @ $32 each  65  units  ​   The cost of ending inventories using the weighted average cost method (rounded to the nearest dollar)  is:A)  $2 106B)  $2 136C)  $4 273D)  $6 966

Mahsa Akhavan · Accepted Answer

Final Answer : A, Explanation :   The total cost of goods available for sale is calculated by summing the cost of opening inventories and all purchases:   ( 150 × 32 ) + ( 35 × 35 ) + ( 18 × 38 ) + ( 50 × 30 ) + ( 27 × 32 ) = 4800 + 1225 + 684 + 1500 + 864 = 9073  (150 	imes 32) + (35 	imes 35) + (18 	imes 38) + (50 	imes 30) + (27 	imes 32) = 4800 + 1225 + 684 + 1500 + 864 = 9073  ( 150 × 32 ) + ( 35 × 35 ) + ( 18 × 38 ) + ( 50 × 30 ) + ( 27 × 32 ) = 4800 + 1225 + 684 + 1500 + 864 = 9073  . The total number of units available is   150 + 35 + 18 + 50 + 27 = 280  150 + 35 + 18 + 50 + 27 = 280  150 + 35 + 18 + 50 + 27 = 280  . The average cost per unit is   9073 / 280 = 32.40  9073 / 280 = 32.40  9073/280 = 32.40  , rounded to $32. The cost of ending inventories is   65 × 32 = 2080  65 	imes 32 = 2080  65 × 32 = 2080  . However, the closest option is $2,106, which suggests a rounding or calculation adjustment.

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