When Using the Weighted-Average Cost Method to Determine the Cost

question 51

Multiple Choice

When using the weighted-average cost method to determine the cost of inventory sold, the weighted-average cost per unit is calculated as the:

• A) cost of goods available for sale divided by the number of units available for sale
• B) cost of goods in ending inventory divided by the number of units in ending inventory
• C) cost of goods sold divided by the number of units sold
• D) cost of goods sold divided by the average number of units in inventory

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Definitions:

Rebuttable Presumption

A legal assumption made by a court that is taken as true unless someone comes forward to contest it and prove otherwise.

Bailee

A person or entity temporarily holding property on behalf of another, under a bailment agreement, wherein the bailee is responsible for the safeguarding of the property.

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to harm or damage.

Real Property

Land and anything permanently attached to it, such as buildings, also including rights and interests associated with the land.