The Weighted Average Cost of an Inventory Item Is Calculated

question 41

Multiple Choice

The weighted average cost of an inventory item is calculated by

• A)dividing the sum of the unit cost on the purchase invoices by the number of units purchased.
• B)dividing the cost of goods available for sale by the number of units on the ending inventory.
• C)dividing the cost of goods available for sale by the number of units available during the period.
• D)dividing the cost of goods sold by the number of units available during the period.

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Definitions:

Share Capital

The amount of money raised by a company through the sale of shares to investors, representing ownership in the company.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

Secondary Market

The marketplace where investors buy and sell securities or assets from other investors, rather than from the issuing companies directly.